One thing I love about my practice is serving new parents who GET IT. They understand how critical it is to ensure their children are provided for if something happens to one or both of them. They realize that children are vulnerable and depend on Mom & Dad, Mom & Mom, Dad & Dad, Mom, Dad, or Nana to keep them safe, healthy, sheltered, and learned. New parents know that just because they don’t have a lot of material wealth doesn’t mean that they can’t protect their young ones somehow. So hats off to all you parents out there who GET IT.
For those of you who are contemplating parenthood, or who just started the voyage of sleepless nights and stinky diapers, or just witnessed the most glorious sparkle that can only be found in your child’s eye when he or she “DID IT!” whatever “IT!” was, I offer 5 tips, particularly from the Land of Lincoln:
- If you have minor child you need a will. Someone is going to have to step into your shoes and take care of your child if you and/or your spouse or partner dies. With a will, you can designate a person who will be recognized by the State of Illinois as a legal guardian, as long as they meet the criteria.
- Illinois has 2 types of guardianship because the state recognizes that caring for children requires more than one skill set (validating what mothers have been trying to point out for decades). A guardian of the person makes the value-driven decisions that affect the child, e.g., education, healthcare, and shelter. A guardian of the estate makes the financial decisions for the child and is critical when a minor inherits a rather large sum of money, such as life insurance.
- Speaking of life insurance, let’s separate fact from fiction. The notion that life insurance isn’t taxed isn’t accurate. Life insurance isn’t typically taxed as income. BUT life insurance is included within your estate for estate tax purposes. So make sure you have good counsel when staring at the twinkle in the broker’s eye as you think about buying that million-dollar policy.
- Also, while we’re on the topic of life, you don’t have to die to begin protecting your family. I wrote about this in an earlier piece and I speak about it often. Powers of attorney allow individuals you trust to step into your shoes and manage your financial affairs and make healthcare decisions for you when you are temporarily unable to. These powers are typically shared between spouses and understood to be held by each spouse in a reciprocal manner, but what if you are Civil Union partners or a single parent? What if your spouse is on sabbatical at Machu Picchu?
- Special needs requires special considerations. If you have a child who is disabled or requires special assistance, you must take care to ensure that the income you provide via your will or trust doesn’t result in your child becoming ineligible for needed government benefits. So, again, seek prudent and experienced counsel.
As I said earlier, I adore new parents who GET IT. However, whether you’re a new parent, old parent, grandparent, aunt, uncle, or you just love kids, be sure the ones you care about are protected.