Attorneys, in general, and those of us in estate planning in particular, often don’t work with people when life is going great. We often see families whose loved one may be very elderly, dealing with a serious disease or accident, or who have passed away. They are in a situation they hoped they would never be in, dealing with issues they hoped they could avoid. Things didn’t go as planned, but how often does life go according to plan?
As stressful as this situation may be, it provides an attorney an opportunity to do what we really want to do, help people. Regardless of what stage of life you’re in, we can help you either take actions to avoid or reduce future problems or, when needed, help you address your current problems.
The reality is your family will experience challenges at one time or another. The only questions are what those challenges will be, how serious they will be, when they will occur, and mostly importantly, will you be prepared when they happen? For example, if you or your spouse were to suddenly pass away, what may happen to your family, financially?
- Do you have life insurance?
- This is a way to cushion the financial blow that will come with the passing of a spouse.
- Most families have a primary wage earner and the other spouse may not work outside the home, work part time or work just as much but make less than the other.
- How much money is needed to replace the decedent’s income or to pay someone for all the services that person does for the family? If you need full time daycare, cooking, cleaning, lawn care, and to replace their lost income for years to come, how much would that add up to?
- If you have a child, how would a college education be paid? If you have a special needs child, you know how costly it can be to provide the help and services he or she needs. How would these expenses be paid?
- What if the two parents pass unexpectedly?
What would happen if both you and your spouse were to pass on or about the same time? This is another reason to have life insurance, covering both parents. If the proceeds are substantial and your children are not old enough or, though older, not mature enough, to handle the money as a contingent beneficiary, you could name their guardian or the trustee of a trust that benefits your children.
These two roles could be fulfilled by one person, two people or you could have a single guardian and more than one trustee (though the more people involved, the more problems may arise). Your estate, through your Will, could also fund this trust.
- What if the entire family passes unexpectedly?
It’s very unlikely you and your spouse will pass at the same time and far less likely your entire family will pass simultaneously. If this happens, it will probably be due to an accident and accidents literally do happen. These accidents (such as vehicle accidents or house fires) often occur due to the negligence of one party or another, and negligence can be the basis of a lawsuit. If you’re engaged in estate planning, think about this possibility.
In addition to the assets in your estate and the life insurance proceeds, the executor, the person responsible for your estate, could have money from a settlement or judgement from a legal action against those responsible for the accident. The compensation from these legal actions may be far greater than the value of your estate and your life insurance combined. Where should the money go? Extended family? Friends? A favorite charity? All the above? It’s a very long shot, but because these terrible events happen, you should plan for it.
To schedule a consultation to discuss estate planning and how life insurance may be a part of it, contact us today.