If you and your spouse (or other parent) are no longer alive, who is going to take care of your newborn?
Whoa! Not what you were expecting? The thought of not being able to watch my boys grow up makes me sick, and the thought of them growing up without my wife and me, is even worse. Unfortunately, bad things happen in life, and the well-being of our children is something we must protect. That’s why setting up your last will and testament should be the first thing you do after having your first child. It’s time to be a grown-up and have an adult conversation.
A last will and testament, better known simply as a will, is a legal document that outlines your wishes in the event that you are no longer alive. This document is your last chance to have your say on the important things in your life. Many people think of a will only as distributing property. And while it does allow you to assign material possessions, a will also allows for the appointment of a legal guardian for your children. Let’s face it, most millennials do not have significant assets or property to disperse, but they do have a priceless possession…their children. Without a will appointing a legal guardian, the court system is left to make the decision for you. That’s a scary thought!
I’ll be honest, discussing your demise and the care of your children is not an easy conversation. But being a parent isn’t always easy, and it requires some tough discussions and decisions. When thinking of who should be the legal guardians of your children you should consider the values and belief system of the candidates. Will they raise them in line with how you would? Will they be able to love your children as if they were their own? Will they be able to maintain guardianship until your children are adults (i.e. grandparents may not be the best candidates)? Will they be able to handle the additional financial responsibility of caring for your children? The hope is you are able to identify and AGREE on a guardian you trust to care for your children.
In addition to a legal guardian, you should also consider appointing a financial representative for your children. This can be the same person as the legal guardian, but you may want to consider a different person. Having a separate person as the financial representative allows for a system of checks and balances; the best person to care for your children isn’t always the most responsible with money. The financial representative is in charge of dispersing funds to the legal guardian for the care of your children, along with making sure the requests are reasonable. A kindergartner doesn’t need $5,000 for back to school clothes…you chuckle, but I’ve seen such a request.
The conversation surrounding guardianship and financial representatives is tough. No one wants to imagine not being alive, especially after bringing home a child, but it’s a conversation you need to have. Once you have it, you can get back to the joys of parenthood. You should periodically revisit your will and make sure there aren’t any updates needed. Again, your will is your last chance to make sure your wishes are carried out, and you want to make sure it is always up to date. Please don’t let a tough conversation, or the assumption that it’ll never happen to you keep you from cementing your wishes in the event that you are not able to voice them.
Where do you start? Call your financial advisor. If you are working with a CERTIFIED FINANCIAL PLANNER™ professional, your advisor should be able to connect you to a qualified attorney who can help you put all of your wishes into your will. Please don’t try to save a few bucks and do it yourself online. This is your child…spend the money to make sure everything is executed properly. Don’t be cheap!
Now that your will is done…go ahead and start that 529 plan!
Disclaimer: Nothing on this blog should be considered advice, or recommendations. If you have questions pertaining your individual situation you should consult your financial advisor. For all of the disclaimers, please see my disclaimers page.