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Even though you may not have many assets to leave to your minor children, it is essential to their future that you create a will so that they are taken care of if you die while they are young. The team at The Hughes Law Firm often helps parents to protect their children’s welfare with a wide range of estate planning tools.
One of the primary facets you may be thinking of is who you should appoint as guardian, and a factor in that decision is financial. You need to know that the person who you trust to raise your children has enough money to adequately provide for them. That person may also hesitate to agree because it would stretch his or her finances to the breaking point. With a life insurance trust, you may be able to eliminate this problem.
According to NerdWallet, you can purchase a life insurance policy that provides for your children upon your death. In addition, rather than just bestowing a large lump sum on the guardian to spread over the next few years, you can have the amount directed into a trust. Then, you get to decide how the money is divided and what it should be spent on, such as an allotted income for living expenses and a college education. You can specify at what age the balance should be given to your children based on when you believe they are ready to handle the remainder of the funds.
A trustee manages the trust, and this person could be the guardian you have chosen. However, you have the option to name someone else, if you prefer. More information about types of trusts is available on our web page.