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What new parents should know about estate planning

Oct 2, 2019 | Estate Planning

Most parents just want what is best for their children. This usually involves making sure that kids eat well, see their doctors and get a good education. However, as parents worry about these issues, they often fail to consider how these needs will be met should they pass away. Although it is an uncomfortable thought, it is still important to address this possibility through estate planning.

While the average person in Florida probably associates estate planning with wills and maybe even trusts, few may realize that life insurance policies also play important roles in this process. For example, should a parent pass away while his or her child is still a minor, the benefits from a life insurance policy could financially secure that child’s future. This money could cover everything from daily living expenses to college tuition. A term life insurance policy is a good choice for most parents, but in some cases a whole life policy can be more appropriate.

Simply leaving enough money to cover a child’s expenses does not necessarily mean that the money will be put to good use. If a child is named as the beneficiary, then it is possible that his or her surviving parent or guardian may misuse the funds or use them in a way that is inconsistent with a parent’s wishes. Creating a trust can eliminate this problem, as it makes sure that money is managed and distributed according to a parent’s wishes.

When welcoming a new life, death is probably the last thing on a new parent’s mind. Unfortunately, not thinking about something does not mean that it will not happen. As such, Florida parents should be sure to think about their children’s future financial needs during the estate planning process.