Raising a young family can feel overwhelming with endless short-term responsibilities that may distract a lot of parents from planning for the future. One critical aspect that is often overlooked within working-class households is the importance of estate planning for your family’s financial security. Having this important document gives instructions on how you want your money and savings distributed after your death to ensure that they are given to the right people.
Although it is often less prioritized by working-class families, estate planning is not exclusively beneficial for the wealthy. Your estate is simply all of the assets that you will leave behind when you pass away, including your bank accounts, home, or car. Without a plan, your assets will generally go through probate or a lengthy court process that settles debts and distributes the assets of a deceased person.
Why is an Estate Plan Important?
Estate planning is important since it will specify how you want your hard-earned money and savings distributed after your death. It ensures that the people and causes you care about will receive what you want to give them. If you have young or disabled children, or elderly parents to take care of, estate planning is vital to their financial security. This ensures that their needs will continue to be provided for.
What You Can Determine from an Estate Plan
Apart from your assets, financial planning will help you figure out what you are worth and how you want your assets to be managed. It will also help you decide who gets what after your death and who you want as your children’s guardian. Furthermore, creating the document will allow you to determine who to trust when carrying out your estate plan.
Why Estate Planning is Important for Young Families
Many young parents tend to assume that estate planning will not be valuable to them as they do not have a wealth of assets. However, you do not need extensive assets to start planning for your children’s security in the future. Estate planning, with the combination of investing in life insurance or setting up a trust, can be beneficial to your child until they grow financially independent into adulthood.
During the process of financial planning, you must name a reliable guardian for your children. This ensures that they will not be given to estranged relatives or the foster care system. Additionally, if you pass away before your children turn 18, they cannot directly control any inheritance you leave them. Creating an estate plan with your lawyer will ultimately give you some peace of mind about the future.
Plan for the Future with Financial Experts
Preparing for financial security is an essential gift that you can give your dependents as early as now. The importance of estate planning cannot be underestimated for your family, but his process is easier with the help of certified public accountants from Tostrud & Temp, S.C. in La Crosse, WI. Schedule a consultation today!