Guide for a Growing Family

Raising a family is the most rewarding challenge parents can face.  You now share the goals and responsibility of protecting your loved ones.  Adequately protecting your loved ones requires proper planning.  Who will take care of your children if you are not able to do so?  Will you have enough money to send them to college? It is important to answer these questions and more when planning for your family’s future.  Here are some simple steps you can take to make sure that you are on the right track to protecting your loved ones.

Purchase Life Insurance – Purchasing life insurance to protect your loved ones is one of the most responsible decisions you can make.  It allows you peace of mind that your loved ones will be taken care of financially if you are not around to provide for them.  Life insurance can be used in many different ways for family planning.

• Income Replacement – Most parents buy life insurance to replace lost income if they were to pass away unexppectedly. A simple term policy can provide ample protection until your children can take care of themselves or until your retirement.  Term life insurance allows you the most coverage for the lowest premium.  It is usually a good idea to insure a stay-at-home parent as well as the bread winner in most cases.
• Special Needs Planning – Parents who have a special needs child can use life insurance to financially support the child when they are not around to do so. A special needs trust can be created in order to receive the death benefit from a life insurance policy and help pay for quality care for the child when they are an adult.
• Estate Tax Planning – If you have amassed an estate that will be subject to estate taxes when you pass away, purchasing life insurance using an irrevocable life insurance trust (ILIT)will allow you leave your beneficiaries the funds needed to pay estate taxes.  The death benefit received through an ILIT will not be included in your estate if set up properly.

Start an Education Fund – A 529 Plan is an education savings plan by a state or institution designed to help families save for future college costs.   Funds grow tax free in a 529 Plan and can be withdrawn tax free if used for qualifying college expenses.   Another option is a Coverdell Education Savings Account (CESA).  A CESA offers more investment flexibility than a 529 Plan but has a $2,000 annual contribution limit.

Consider Long-Term Disability Insurance – If you become disabled for an extended period of time, how will your family cope financially?  Long-term disability insurance is not as expensive as you think.  Purchasing coverage that will allow you to at least cover your basic living expenses could make sense.

Important Estate PLanning Documents to Consider

Create a Will or Trust – It is important that you plan your estate properly.  Having a will or living trust could go a long way in helping you plan for the unexpected in advance.  A will provides instructions for the distribution of your property upon your death through the probate process.  It also allows you to name the guardians for your minor children.  A living trust allows you to distribute your property and name guardians for you minor children while avoiding probate and keeping the matters of your estate private.  You can transfer your assets into a living trust and name a successor trustee who can provide for continued management of your assets if you become incapacitated or upon your death.

Power of Attorney – There are several types of power of attorney (POA) documents that can be used.  A POA simply allows you to appoint an “agent” (someone that you trust) to make healthcare and financial decisions on your behalf.  You can choose a regular power of attorney that ends when its purpose is fulfilled or at your incapacity or death.  You could also choose a durable power of attorney that will remain in effect if you become incapacitated.

Living Will – A living will allows you to instruct your family and doctors about how to treat you if you become incapacitated.  You can explain what kind of care you want and what kind of care you refuse.  In some cases, you can name someone to make your medical decisions for you.

Each state has its own requirements for filing these documents.  The descriptions above are simply a guideline to consider when planning.  It is best to discuss these documents and whether they are a good fit for your situation with a qualified attorney.

Planning is Key – Protecting your growing family doesn’t have to be complicated.  You can start with a simple but effective plan by using a will and life insurance.  If you are looking for a more comprehensive plan, there are other documents, investment tools and insurance plans that you can use as well.  If you have any questions about protecting your family with life insurance, we can help.  We will give you a free no obligation consultation.  Call us at 888-687-9444 or email us at info@archstoneagency.com with any questions.

*We do not offer any legal or investment advice.  This blog post was meant to offer a general guide as to some of the estate planning documents and education investment vehicles available.  It is best to consult with an attorney or an investment representative for specific advice on these matters.

About Us

Archstone Insurance Services, LLC is an independent agency that shops over 40 of the top life insurance carriers to provide huge savings on life insurance coverage for our clients.  We are happy to answer any questions you might have about any of the insurance products we offer, your planning needs or your existing coverage.  Feel free to call us directly at (888) 687-9444 or email us at info@archstoneagency.com.