Let’s face it: Life is full of uncertainties and as parents, we endeavor to protect and secure our children’s future in every way, shape, or form that we can. Mainly, a life with proper guidance, care, and protection is what we’re all aiming for. And deep in our hearts, we want them to have a comfortable life, no matter what the future holds.
But how exactly can we do this, aside from building a hefty trust fund and leaving them with an enormous amount of money? Here are three important things that will protect and secure your children’s future:
Guardianship and Estate
Don’t think it’s too early to have a will in place. Many people shy away from this topic, saying that what they have isn’t enough to cause a squabble among family members, but that thought is far from what happens in real life.
When making a Will, make sure to have these two things stated on it: a designated guardian/guardians and testamentary trusts. These are control measures that will ensure the children’s inheritance is managed properly and paid out to them over time. This can be done with the help of experienced family lawyers who can help you create a will that will reflect your final wishes for your children and other beneficiaries.
In the Will, there should be an appointed guardian or co-guardians whom you trust to care for your children in your absence. It’s better to appoint someone or people you personally trust and have your children’s best interest at heart. Otherwise, the court will do the choosing for you and there might be a possibility of choosing someone willing to accept the responsibility but not the best person or people to care for your children. As a result, they might not effectively carry out your final wishes as you have stated in your Will.
Guardianship is an important part of the Will as children are not capable of handling a sizable amount of money on their own; they’ll need someone to transact on their behalf. This is why it’s important to have someone — a trusted guardian/s — to manage the children’s finances until they reach legal age.
Upon reaching legal age, a testamentary trust can further protect the mismanagement of proceeds and inheritance. Everything will remain managed by a trusted guardian and prevent young heirs from blowing their fortune.
Insurance and Coverage
Life insurance is a safety net everyone must consider having. This is to ensure that you and your children are financially protected in the event of business or income loss.
When getting life insurance, consider getting one with high coverage, as this can be used for paying off bills, college expenses, and childcare expenses in case your income stops.
Life insurance comes in different options but you can customize plans based on your needs. It’s best to find an option that is convenient and works for you. After all, you’re funding it with your hard-earned money. You’ll want to make sure that you get to use the benefits should you or your children need them.
College Fund and Savings
Consider building up college savings for your children as early as their first year of life. Keep the end in mind: how much are they likely going to need to support them through all their years in college. Build up on the goal amount little by little — there’s no better time to start but now.
If you are still currently paying off debt, it’s important to restructure your budget and cut down on expenses you can do without. To effectively start saving, the debt must be paid out first. Zeroing out debt may sound like a Herculean task but with determination and discipline, it can be done.
If you need hand-holding while sorting your finances and your current financial situation. A financial adviser can do just that. They can guide you through the process of reviewing your financial situation as a whole and setting your financial goals to pay off all debt and start saving for the future.
They can also help you choose a tax-advantaged bank product that is designed for saving funds for education. With college funds in the bank, you can keep from withdrawing or dipping into your retirement fund prematurely and allow it to reach a maturity state that offers the most advantage and benefit to you.
It’s never too early to think about these things and putting them in place. While our goal is to watch our children grow and be the ones to care for them, we never know what the future holds. That said, it’s best to be prepared, as it’s the only way we can continue taking care of our children until they’re old enough to go through life independently.