5 Legal Things You Can Do to Protect Your Children
Protecting your children is a priority for all good parents. However, there are many things that are easily done and can prevent a substantial amount of heartache that people do not often think about. Five easy, and relatively inexpensive things (inexpensive when considering the potential effects if you do not do them) are often forgotten when making preparations to protect your children.
- Update or Get a Will
- Get a Living Will (Advance Healthcare Directive)
- Enter into a Prenuptial or Postnuptial Agreement (also known as a “Marital Property Agreement” or a “Partition Agreement”)
- Set up a Trust
- Get Insurance (UM/UIM, Life, Health, Homeowner’s, Disability)
If you die without a valid Will (you die “intestate”), the state where you live will typically decide who gets any property you left. By having a current Will, you can save your children and other loved ones from having to worry who gets what. I cannot tell you how often a person dies without a Will after they have been separated (but not divorced) from their spouse for decades. The family members are often surprised when the surviving spouse gets a substantial portion or all of the deceased person’s assets. This could have easily and inexpensively been solved by simply having a valid Will.
Something you need to consider now to protect your children when making your will is who will become the guardian of your children? Additionally, if that person does not want to become the guardian or is unavailable, then who should get the kids?
Many people want to draft their own Wills to save a few hundred dollars in attorney’s fees. While it is possible to do this, it is never recommended: for a Will to be valid, all of the requirements in the probate code must be met with exactness. If any requirement is lacking or not done perfectly, the Will is likely invalid, and you would potentially die intestate. Do you really want to risk dying intestate and allowing the state to decide who gets what and who will take care of your children just to save a few hundred dollars? Hire an attorney to draft your Will to make sure your Will is valid.
If you are ever on life support or unable to make medical decisions, what do you want done? You can decide now with a “living will.” Do you want to have your life sustained as long as medically possible, or do you fear the indignities of deterioration, dependence and hopeless pain more than you fear death? In what situations do you want the “plug pulled” or do you want to be kept alive?
The decision to keep you on life support can be a terrible decision for your spouse, children, or other loved ones to have to make. There could be a disagreement between family members, potentially creating lifelong divisions or grudges between family members. By having a Living Will in place, you can prevent these problems and cause less heartache to your family because they will know exactly what you would have decided if you were able to decide.
Like Wills, Advance Healthcare Directives also must follow certain procedures to exactness, so make sure to have an attorney draft your living will for you to avoid it being made invalid.
If you get divorced from your current spouse, or if you die, how do you want your property divided to help your children?
Many people do not realize that Prenuptial or Postnuptial Agreements help control how your assets will be divided at your death. Instead, most people only think that a Prenuptial or Postnuptial Agreement affects how the spouses’ assets would be divided upon a divorce. Depending on the state you are in, however, your death could be treated virtually the same as a divorce in determining how your assets will be divided. If there is a prenuptial agreement, this could help preserve assets for your children and for those you want to receive your property in your Will.
Like Wills and Living Wills, certain procedures must be followed with exactness for a Prenup or Postnup to be valid, so make sure to have an attorney draft your prenup or postnup for you.
Trusts can be very helpful in protecting assets for yourself and for your children. If a trust is set up properly, the assets you put in the trust can potentially be protected against creditors or people you injure. For example, if you cause a car accident which results in severe injuries to other people, and if your liability insurance is insufficient, the people you injured could obtain a judgment against you and have a sheriff seize your assets to help pay for the damage you have caused. If a trust is properly set up, however, the assets that you put in the trust can potentially be protected, and you or your children may potentially be able to still enjoy the income from those assets.
Trusts are complicated to set up, however, and certain procedures must be followed to keep the assets away from potential creditors. Get an attorney to set the trust up for you so that you are protected properly.
I am always surprised at how often people get less insurance than they should. For car insurance, make sure to get a substantial amount of Uninsured and Underinsured Motorist Coverage (“UM/UIM” coverage). If a person with the minimum statutory insurance or no insurance at all causes an accident, and you are permanently disabled, the statutory minimum of liability insurance (in some states as low as $15,000) will be insufficient to pay for all of your losses. If you are injured and spend only a few days in the hospital, you are potentially looking at hundreds of thousands of dollars in medical bills. If you are disabled or killed, there is no way that the statutory minimum amount of insurance had by the person who caused the accident will be able to cover your losses. If you have Under Insured or Uninsured Motorist Coverage, however, your own insurance can step up and make payments to you and to healthcare providers.
By getting UM/UIM insurance, you are helping to protect yourself and your children by making sure at least some money will be available if you are disabled or killed in a car accident when someone else is at fault.
Also, make sure to hire an attorney when seeking payment from insurance companies. Insurance companies love when people do not hire attorneys because they are able to undervalue claims substantially. An experienced attorney will know the value of your claim and will be best able to help get the insurance companies to pay. A lawyer also creates a shield between you and your insurance company so that the insurance company is not as able to talk to you and later twist your words.
If you die, how much money would it take for your children to survive until they can provide for themselves? Make sure to account for inflation. An insurance agent can help you calculate an appropriate amount of insurance for you.
You can name your children as the beneficiaries of your life insurance policy, even if they are minors. Depending on several things, someone may be put in charge of taking care of the money (a “guardian of the estate”). You can even have the money put into a trust for your children and have them receive it at a certain age or upon certain conditions.
According to a 2009 CNN Article, 60% of Bankruptices in America are Prompted by Medical Bills. Make sure to get sufficient health insurance so that if the worst happens, you are still protected.
Even if your home is paid for, get homeowner’s insurance. Homeowner’s insurance not only protects your house in case of a fire or other common catastrophes (not typically floods), but it provides you with some general liability protection. If someone comes over to your house and falls because one of your children left a toy on the stairs, your homeonwer’s insurance can come in and pay for your or your child’s liability. Remember, if someone fractures bones and spends a few days in the hospital, you are looking at potentially hundreds of thousands of dollars of liability.
If you become disabled, who will care for you? Who will pay for the added medical bills, or the expenses of converting your home into one that is wheelchair accessible?
Protect your children by getting disability insurance for yourself.