or getting their names down for the school you want them to go to. You want to ensure that they do not miss out on anything they need in life.
This preparation does not stop once they get older. You still need to make sure they will be able to survive on their own two feet once they reach adulthood. This can sometimes involve thinking about the less pleasant aspects of life, such as what they will do should something happen to you…
Set Up a Trust Fund
If the worst were to happen, you may want to ensure that your money and belongings go to the correct beneficiary. For many, it might seem confusing, especially when considering what the difference is between a will and a trust, and how does a trust work? While a will is implemented after death, a trust takes effect while a person is still alive. For someone who has been diagnosed with a debilitating illness, or is likely to lose mental capacity, this might be a favorable option.
Nominate a Legal Guardian
If something were to happen to both parents, it may become necessary for another legal guardian to be nominated. This person is usually specified within your will and, upon the death of all living guardians, would be given the power to make legal and financial decisions for your child up until they reach adulthood. You can also specify for them to make decisions regarding your estate; however, this would need to be discussed prior to implementation.
Set Up a College Fund
Your child may have aspirational plans for the future, or simply want to further their education. Some types of college funds, such as the 529 plan, may offer financial benefits. The money within these funds can be used at any eligible college or university, meaning it cannot be simply squandered away, which can give parents a level of reassurance if they doubt their offspring’s capability and responsibility with money.
Setting up this plan, and paying into it over a number of years, can allow your child a bit more financial freedom, especially taking into account the rising living and education costs.
Your child may be small now, but it will not be long until they are either off to college or finding independence. No matter the situation, good or bad, it is imperative that all outcomes are planned for, so that your child will always be looked after and have financial and emotional security. As they get older, it might be worth discussing this with them, particularly if you want to give them a say as to who would look after them in your absence, as well as to educate them on the importance of these decisions for when they have children of their own.
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