It won’t happen anytime soon but one day your kids are going to have to completely fend on their own. They won’t have you to call for advice, or guidance, or financial help. If you have done your job as a parent and raised them properly, they may feel sad, but they will be able to step up to the plate. On the other hand, you can’t leave your kids with a mountain of debt, no final arrangements or will and think that they be able to pull things together while they are grieving. Follow these tips if you want your kids to be taken care of and be able to care for themselves in your absence.
Preparing Your Kids to Be Independent
Well before you get to the point of making final arrangements, you have to put your kids in a position where they understand why it is important to be responsible. As they grow up watching you handling financial affairs, going to work, and budgeting money, they are going to prioritize things as they have seen you do so. So, you really have to remember that kids are impressionable from a young age. If you sit them down and talk about the future with them practically, they will remember the lessons you showed them. Prepare your kids to value their independence and show them why being responsible in their lives is a great benefit.
Leaving Them Property and Cash
One excellent way to be sure that your kids will be in a good financial position is to leave them a combination of property and liquid assets. If you have multiple children, instruct them to divvy up the money that you have in your bank accounts. Try to purchase enough real estate so that each child has at least one property. This real estate can become your children’s rental properties for commercial or residential tenants. Remember that whatever you spend on real estate today is going to be nothing compared to the cost of buying the same real estate 40 to 50 years from now. With liquid assets as well as real estate, your children will have the ability to make major financial moves.
Making Sure Your Take Care of All Debts
Before an estate can go through probate, all outstanding debts must be satisfied. This includes debts such as unpaid tax bills and property liens. The long story short is that if you don’t have your act together, your children will have to wait a long while before they can get access to their property and money. What’s more is the fact that the debts are going to reduce the total amount they are to receive. You will have no part in the process, you won’t be able to protest, appeal, or ask questions when you are gone. So, what might look like a small little thing to you now could cost your kids hundreds of thousands of dollars in inheritance money. Work with an accountant and a lawyer to keep on top of debts that could impact your estate.
If needed, consider a life settlement option. This allows you to tap into the value of your life insurance policy before you pass. You get some portion of the overall value, and the buyer will receive the full value of the policy upon your death. Often times this can make sense for seniors who have a cash need now or simply want to put the money to use while they are still living.
Getting the Right Life Insurance
Life insurance is a type of product that you pay into for years in return for your family being able to eventually cash it out. You’ve got to compare life insurance quotes to learn which company will offer you the very best terms. Sure, your employer might offer life insurance but that doesn’t mean that you should just happily accept the first policy option extended to you. In fact, you might want to get life insurance provided by your employer as well as branching out and getting secondary coverage. Get one whole life insurance policy, then term coverage, letting them build up until your family has access to a nice amount of money.
Putting Together a Detailed Will
Your last will and testament is going to be the one document that you are expected to alter periodically over the years. After the birth of a new child, you will need to modify your will. When you buy a second home or add an addition to an existing property, changes should be made. Getting a new life insurance policy, getting divorced, or getting out of the military are all reasons that it makes good sense to update your will. You have to know who your executor is going to be and you should tweak your will to have precise language. Some parents go through the trouble of recording videos giving their children their final instructions to show them how much they love them, but also to ensure that their loved ones understand clearly.
Talk About Things
It is so very hard to talk to your children about your final wishes. People will get emotional and some will want to avoid these talks altogether, which is more than understandable. But the fact of the matter is that life is a cycle. When your cycle is complete, you won’t want your family to be afraid or uninformed. This isn’t a talk that you have to have all the time with your relatives, but there will be a day when it becomes apparent that it is the logical next step. Let your children know what you want them to do when you are gone. Show them that you value them while you have the opportunity and tell them that they will be strong enough to keep the family going. It will be these words that they come to rely on when they feel weak.
Think about how you have handled or will handle things when your own parents are no longer here. Sure, the experience itself may not be the greatest but when you consider what your parents would want you to do, you can’t help but make everything work. They wouldn’t want you moping around or losing sight of your life passions. So, give your children the same kind of inspiration to move forward. If you help them to prepare both emotionally and practically then they will have a much easier time of things.