Estate Planning With Your Children in Mind

Have you prepared your loved ones for the inevitable? Planning for babies, college, a vacation, or buying a home is always at the top of the list, but end-of-life planning often falls by the wayside.

“I remember having knots in my stomach,” says Montrie Adams. “When you’re thinking about life insurance, you’re really thinking about death.”

Although it wasn’t easy, Montrie and her husband, Todd, didn’t want to follow the example of relatives who had died without having in place executors, beneficiaries, or money to cover burial expenses.

Life insurance payouts can be used to pay off debts and loans, making it possible for homeowners to keep their property; finance a child’s college education; maintain a family business; and provide a steady stream of income for surviving family members.

According to a September 2011 survey from LIMRA, an association that provides consulting, research, and other services to insurance and financial services companies worldwide, the proportion of U.S. adults with life insurance protection has declined to an all-time low. Only 41% of adults in the U.S. own life insurance policies. Yet, poor planning can leave a hefty burden on your loved ones. According to the National Funeral Directors Association, the average cost of a funeral is about $7,000.

Leaving money to pay for burial costs as well as to heirs is just part of the estate planning process. For families like the Adamses, it’s critical to add another layer of protection. The couple crafted an estate plan that also provides a guardian and a financial trustee for their children, Tadj, 10, and Najah, 8.

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