More people are choosing to have children later on in life. No matter what stage of life you have a child in, they can bring an abundance of joy and fulfillment—and financial challenges! While all parents work hard to ensure their children are provided for both during and after their lives, older parents are faced with some unique estate planning and retirement decisions.
Make Sure You Have an Estate Plan.
This may seem obvious, and while you have probably heard it dozens of times it cannot be said often enough: make sure you have consulted with an attorney, developed, and executed your estate plan! In addition to minimizing the emotional and relationship-destroying havoc that often follows the death of a family member who does not have a will, an estate plan allows you to identify a guardian to care for your children. Because you are an older parent, it is more likely that you will pass away earlier in your child’s life. Should the worst happen, an estate plan that designates a guardian for your child minimizes the risk that your child will end up with someone you do not think is as capable of caring for them.
Consider Setting Up a Trust for Your Children.
A trust is a legal instrument that allows you to exercise a greater deal of control not only over who gets your assets, but how they will receive them and what those assets can be used for. Trusts can also allow you to provide for your children in certain tax-exempt ways that allow them to use more of the funds you designate for them. One of the benefits of setting up a trust is that it allows you to designate a trustee, who is the person who will administer the trust in the way you see fit to ensure your child’s needs are met after you pass. Trusts can be created to provide for your child’s education, healthcare, housing, or any other needs. They are infinitely customizable, and you can even attach certain conditions to using the money within them.
Prioritize Your Retirement Savings.
Save for retirement or send your kid to college? That is a debate many parents grapple with. Often, it is better to focus your estate planning on saving for retirement so that you are more financially stable into your later years. Plus, it is more difficult to borrow to finance your retirement than it is for your child to borrow to finance their education.
Don’t Forget About Social Security.
Did you know that your child can receive social security benefits through you? Often, if you are receiving benefits and your child is under the age of 18 and still in school, they can receive benefits. There are some drawbacks to this arrangement, and you should always consult with an experienced estate planning attorney before deciding whether it makes more sense for your family and your finances to wait until you can receive your full benefits to take advantage of this.
At M&A Law, our attorneys have extensive experience helping parents of all ages create estate plans that provide for their families after they pass. Contact M&A Law Firm, PC today to discuss your options.