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Watching a young child learn to take that first step, say that first word, count for the first time, makes a parent swell with pride.  Parenting books and blogs with parenting tips are popular because parents want to do everything they can to ensure their child’s future success in life.  And most of that planning centers around the parent being there, helping each step of the way, as it should.  As you and your spouse go out on your date-night, consider – will they be all right if anything were to happen to us?

Parents of young children often look to life insurance to take care of their family if anything should happen to them.  Having the funds in place to ensure your families future success is one thing, but without having a proper plan in place to ensure the money gets into the right hands at the right time, you could be funding a disaster instead of your dream for their future.  How to you avoid that?  Answer these three questions:

Who should raise your child if you can’t?

No one parents like you do and no one knows your family and friends like you do.  Imagine a judge having to decide where your children should go – he knows your family only from the perspective of who and what shows up in his or her courtroom.  If you haven’t given your direction in a will who should be the guardian of your children, your family and the court will be left to sort it out for themselves.

Should money be available for the early years?

Life Insurance companies are not in the business of raising two year olds.  Nor is your life insurance agent trained to discuss with you the options you have in naming a beneficiary.  If you want to ensure that your children and their guardian have the ability to pay for life’s necessities your best option is to have a trustee in place to manage the funds for your children’s benefit.  Otherwise, the court might have to control those funds.  In the case of some insurance companies, they’ll just hold the money until the child reaches the age of legal majority.  Without proper planning your children could have too little too late.

What help should there be for that transition to adulthood?

Speaking of the child reaching 18 years of age, how many 18 year olds do you know that you would trust with managing $200,000 or more?  Those funds that could have paid for four years at Boston University can easily be spent at the Bahamas.  Wouldn’t you like to know that the funds are going to be used for a good purpose?  A trust can require children to reach age 25 before control of the funds passes to them.  A good plan can ensure that your children won’t have too much too soon.

A good estate plan can give you one less thing to worry about.  Which is important because your toddler is pushing a chair over to the counter.

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