Financial and Legal Family Safety Nets Parents Need to Know

Naming Legal Guardians

One of the most important documents for a family is guardianship of children. Without a legally named guardian, children can become wards of the state if you lose custody or their guardian passes away. This could have implications for the children, and consulting with a domestic violence lawyer, family law attorney, or local advice service can help you determine what to do and how to go about naming the legal guardian(s) of your children should something happen.

Family Safety Nets from Living Trusts

Unfortunately, 55% of people in the US have no estate plan at all. Estate planning is one of the most critical legal features you have access to, as it decides what happens to your estate should you become incapacitated or pass away. One of the most useful products is a living trust:

• With a living trust, any assets don’t go through probate, saving time and money.
• An appointed successor can manage your affairs if you are unable to do so yourself.
• Assets within a living trust are protected from creditors and beneficiaries.

Lasting Power of Attorney

One of the most controversial legal protections is the lasting power of attorney, because this privileged position can be abused. It is a complex system, but in short, it allows you to appoint someone to make decisions on your behalf and grants access to things like your assets and bank accounts. This is often a last resort, but one that can be very helpful if you are injured or fall ill, and is usually necessary for your partner to access specific things like bank accounts.

Private Life Insurance Policies

Life insurance is among the most widely used policies in most countries. It can be a great way to ensure your family has some income in the event of your death by providing a lump sum. The sum paid out is proportional to the monthly instalments you make, and it can be significant with higher-tier policies. It can also act as a financial cushion in case you lose your job and subsequently lose access to your Death in Service insurance benefits from an employer.

Other Insurance-Based Family Safety Nets

In the US, around 100 million people don’t have life insurance, which is a problem if something terrible happens. However, life insurance isn’t the only type of insurance that is helpful when it comes to family situations, and choosing the right insurance for specific needs is critical.

Income protection insurance

This is one of the most overlooked yet important policies. Income protection insurance can provide you with access to extra funds should you lose your job or usual income stream.

Critical illness cover

Illnesses like cancer and other conditions can happen to the best of us. With critical illness cover, you can arrange a lump sum to be paid if you are diagnosed with specific illnesses.

A personal accident plan

Like an illness, everyone can be subject to an accidental injury, and this can cause you to lose money by being unable to work. A personal accident plan offers access to generous payouts.

Medical Consent Forms for Children

Children are often cared for by others, such as grandparents or professional child carers. However, anything can happen when out and about, such as on a trip, and whoever looks after the kids needs consent before they can authorize medical treatment. In the event you cannot be reached, this is a vital and necessary legal product that will potentially save the life of your child. With this form, a caregiver can make the medical decisions that you are unable to.

An Accessible Emergency Fund

Financial cushions can be the difference between your life falling apart and bouncing back after something life-changing, such as losing a job. With around six to twelve months’ worth of expenses saved up, you will have ample time to find a new career while meeting the cost of living. However, make sure your emergency fund is in an easily-accessible bank account so you don’t have to wait to access the money, which can be vital after something like a home loss.

Digital Asset Family Safety Nets

Around 44% of high-net-worth individuals manage their assets online, and you need to arrange access to these in the event you are unable to. Passwords, online banking, and even cloud storage access must be legally granted to someone who can manage them for you:

• Set up a digital vault for a legacy contact who can be given access to digital assets.
• Keep hard copies of passwords and usernames in a locked place like a wall safe.
• Task your lawyer or someone you trust with looking after your access credentials.

A Letter of Wishes

Although it isn’t a legally-enforceable notice, a letter of wishes can be a major advantage when you have demands that you want carried out. Where a will provides detailed instructions on what should be done, writing your letter of wishes to trustees is a way to explain why you want things done a certain way, such as how you want the kids to be raised when you are gone. This is important for life issues, such as the religion you wish your children to be brought up with.

Summary

Naming legal guardians should something happen to you is one of the most valuable family safety nets you can have as a parent. There are also various insurance policies that can be a massive advantage, such as income protection insurance. But beyond a will, you can also write a letter of wishes that explains specific things you want, such as the religion for your children.