There is no wrong time to build an estate plan as a parent, but there is always a right reason. Whether you are expecting your first or your youngest just started high school, the people who depend on you deserve to have something in place.
KF Law works with parents in every stage of life. Oftentimes their main goal is making sure their children are taken care of if something were to happen to them. Here are the steps to take to ensure your growing family is protected every step of the way.
This is the decision most parents think of first, and it is one of the most important things your estate plan can do. If both parents were to pass away while your child is still a minor, a court will decide who raises them. Your will is the place where you tell the court who you want that to be.
Choosing a guardian is not always easy. It involves thinking through values, lifestyle, parenting philosophy, geography, and the willingness of the person you have in mind. Sometimes the right guardian for day-to-day care is not the right person to manage money on your child's behalf, and those two roles can be separated.
What I tell parents is this: an imperfect choice made today is far better than no choice at all. You can always revisit it. What you cannot do is make that decision after the fact.
As we mentioned in a previous article on life insurance, minor children cannot directly receive an inheritance. If assets are left to them outright and they are still a minor when you pass, a court-supervised guardianship of the estate will manage those funds until they turn 18, at which point everything transfers to them with no conditions.
For parents of older children, a trust still serves an important purpose even if your child is no longer a minor. A 22-year-old is legally entitled to receive an inheritance outright, but that does not necessarily mean an outright distribution is what you would choose. A trust lets you build in structure around timing, purpose, or conditions that reflect your actual intentions rather than the default the law provides.
Your life insurance policy, retirement accounts, and any accounts with a transfer-on-death designation pass directly to whoever is named, regardless of what your will or trust says. If those designations have not been updated since you've had children, now is the time.
Naming a minor child directly on any of these accounts creates the same court guardianship problem described above. If you have a trust in place, naming the trust as beneficiary is typically the cleaner approach. If you have not yet set up a trust, at minimum make sure your designations reflect your current intentions and that a contingent beneficiary is named.
If you do not have a will, this is the document that names your child's guardian and establishes how your assets are distributed. Without it, Illinois intestacy laws determine both of those things, and the outcome may not reflect your wishes.
If you already have a will, review it. A will drafted before your children were born may not automatically account for them depending on how it was written. A will from ten years ago may name an executor who is no longer the right choice, or reflect a financial picture that has changed substantially since then.
A durable power of attorney for property and a healthcare power of attorney are not just for older adults. If you were incapacitated tomorrow, someone needs the legal authority to pay your bills, manage your accounts, and make medical decisions on your behalf.
As a parent, the stakes of not having these documents are higher than they were before. Your family needs someone who can step in and keep things running, not a court process that takes time and money you cannot afford to lose right now.
If you do not have life insurance, or if your current coverage was set before your child arrived, it is worth revisiting. The calculation changes when someone depends entirely on you. Income replacement, childcare costs, mortgage coverage, and future education expenses all factor into how much coverage makes sense.
Life insurance is not an estate planning document, but it is one of the primary financial tools that funds your estate plan's intentions. The two should be looked at together.
Once your child turns 18, they are a legal adult, and you no longer have automatic authority to make medical decisions for them or access their medical information. If your college-age child were in an accident and could not speak for themselves, you could be locked out of conversations with their doctors without the right documentation in place.
A healthcare power of attorney and a HIPAA authorization for your 18-year-old gives you the legal standing to be involved in their care if something happens. It is a simple step that most families do not think about until they need it, and by then it may be too late to execute it properly.
If you have children heading to college or already in early adulthood, this is worth addressing alongside your own estate plan.
Start with the most time-sensitive pieces: the will, the guardian designation, and your beneficiary designations and build from there.
If your children are older and you have been putting this off for years, there’s no reason to feel behind. It is a reason to act now. The plan you put in place today, whatever stage your family is in, is far better than the one that stays on the to-do list.
We work with families at every stage of the parenting journey. Reach out when if you're ready to get a plan in place.
This article is for informational purposes only and is not intended as legal advice. Please consult a qualified estate planning attorney regarding your specific situation.