Estate Planning for Young Families

June 14, 2022
Alec Borenstein, Esq.

Young families are typically busy juggling careers, raising children, and being active in the community. Planning for an unexpected illness or a tragic occurrence is often overlooked because it feels premature and unpleasant to think about. However, young, growing families need to prioritize estate planning sooner rather than later in life. Establishing an estate plan now will save money and time and ensure that your wishes are carried out if you become sick, disabled, or in the event of an untimely death. Ensuring that your family is prepared if they’re faced with unforeseen circumstances is one of the best ways you can take care of them.

Estate Planning is not Just for the Wealthy

Selecting an experienced estate planning attorney to guide you through the process will ensure that your plan works effectively when it should. In some cases, young families may not have many assets. Therefore, an estate plan can begin with just the most essential documents, and it can be updated as time goes by and you start acquiring more assets. However, it is vital not to put off even the most basic estate planning, as not having a plan can cause your family financial hardship brought on by legal fees and court costs. It can also cause a delay in your family’s ability to access your assets. Even a simple plan will provide you with peace of mind knowing your family is protected if something should happen to you or your spouse.

Done is better than perfect

The number one reason why young families do not create wills is because they are not sure who is going to be guardians for their children. When creating your plan, you want to think about what would happen in the next seven to ten years (and not longer) because you will probably update your will ten years from now. Also, do not forget that done is always better than perfect. That means that having something is better than having nothing at all because if you do not have anything and something happens to you it could lead to a major rift in your family which would devastate your children.

Essential Estate Planning Tools

Below are valuable tools essential to estate planning and work to protect your family and manage your financial affairs.

  • Will - For young families, a will focuses on ensuring that your assets pass in the way that you want to your children in the even that you and your spouse pass away. In addition to naming an executor who will make sure the terms of your will are carried out, you can name a personal guardian to care for your minor children. You can also use your will to set up a trust for any property you’re leaving to your children and a trustee to manage it in your children’s best interests until they reach a certain age. Trusts can contain money, bank accounts, property, stocks, businesses, valuables, and other investments.
  • Life insurance - This is more of a financial planning tool than something included in estate planning. Still, we include it here because it’s essential to consider when planning how your children will be cared for if you or your spouse dies unexpectedly. It serves to replace lost income to help support the family temporarily. Term life insurance is generally quite affordable if you’re reasonably young and healthy.
  • Living Wills and Durable Powers of Attorney –An advance medical directive or a living will and durable powers of attorney for health care and finances are critical documents every adult should have. If you are involved in an accident or suddenly faced with an unexpected illness, these documents will make things easier for your family and allow them to focus on caring for you. In a living will, you state your wishes for end-of-life care. If you do not wish to be put on life support and receive only palliative care, this document will express these wishes. A durable power of attorney (DPOA) for health care is someone you trust and give authority to carry out your wishes in your advance medical directive. This person is also known as a health care agent, health care proxy, or surrogate. A durable power of attorney for finances gives someone you trust the authority to manage your assets when you are unable to.
  • Beneficiary Designations – A straightforward yet essential task is to name beneficiaries on any retirement accounts - IRA or 401(k) – and life insurance that you may have. These designations can be changed later if you choose by completing a simple form. If you have minor children you want to make sure that you do not name your specific children as beneficiaries but, instead, name the trust that you created in your will for their benefit as beneficiaries. Otherwise, your money could get stuck and be locked up until your children turn eighteen which is not what you want. You want your guardians to be able to use the money for your children as they get older.

 

There are many valuable tools forestate planning at your disposal and will allow you to protect your family while avoiding the delays and legal fees associated with probate court proceedings. Estate planning ensures that your assets are seamlessly passed on to the beneficiaries you designate. Estate planning allows your family to cope with whatever they face in your absence without worrying about their own security and stability.

Get in touch with BMC, your trusted advisors, for your estate planning needs. We are here to help you ensure that your family remains protected as it continues to grow.

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About us

Borenstein, McConnell & Calpin, P.C. is a Wills & Estate Planning law firm serving Central and Northern New Jersey, as well as New York City. We strive not only to give you a great client experience, but to become your trusted adviser for life. To reach Alec, please send an email to alec@bmcestateplanning.com.

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