Estate Planning basics for parents of young children

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As a parent of young children, one of the most important things you can do is to reject the false idea that estate planning is only for old folks. In many respects, estate planning is EVEN MORE IMPORTANT for you and for your minor children.
For example, for an elderly person, their estate plan is mostly focused on distribution of their surplus assets over a period of time. Again, the main focus is property.
In contrast, for a parent with young children, the main focus is the children—what would happen to such children if their parents were no longer there to take care of them.
Who would care for the children? Would there be life insurance or other assets to provide for such children’s material needs?
Again, the need for proper planning is in many respects MORE IMPORTANT for young parents (with young children)!!!
Ok, now that we have laid that foundation—where should you start?
Step #1: A basic Will is a good place to begin. A Will has many purposes, but in this context, appointing a guardian for minor children is the first priority (in the event the parents are no longer there to care for the children).
Without this key legal document, if both parents are deceased, a judge would have full discretion to decide who would be the guardian of a young child. Of all the things you care about and want to plan for, is there ANYTHING more important than who would take care of your children if you were not there?
Step #2: Life insurance is the next consideration. You want to obtain the right type of life insurance and the right amount of life insurance—all with the objective of ensuring that if you and your spouse were gone, there would be sufficient money available to provide for the needs of your children (housing, food, education, medical expenses, etc.)
One important caution with regard to life insurance, please do NOT make the mistake of assuming that naming a minor child as a beneficiary of such life insurance the correct thing to do. In almost all instances, this is NOT the right move, for a variety of reasons, including the very simple and fundamental fact that a life insurance company will NOT pay life insurance proceeds directly to a minor child.
so what then do you do? Who do you name as beneficiary of such life insurance?
Actually, in most instances, it will be a what rather than a who that becomes the proper beneficiary of your life insurance. We will take it from here during our next video.
Stay tuned.
Thanks for watching.

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