This is a PSA for all my friends with kids. If you haven't already, get your estate in order! I had a conversation this weekend with a friend who works in the same location as her husband. She made a comment that if anything happened at work, her child would be an orphan, and their friends (who live in another state) would have to adopt the kid. I immediately asked her if she had a will, and she sheepishly said no. I then asked her if she had life insurance, and she also said no!
She and her husband are both responsible, financially secure engineers with MBAs, so the lack of knowledge around estate was surprising for me. As I thought about it more, I realized they are probably not abnormal - there are probably a LOT of new parents who haven't thought about estate planning - after all, who wants to think about their death?
This particular situation is a good one to blog about - the first red flag is that my friend (let's call her and her husband Couple A) wants guardianship of her child to go to another couple (we'll call them Couple B). Couple B is not related to Couple A, so it is extra important that Couple A is absolutely sure that Couple B is ready and willing to raise an extra child and that Couple A puts it in writing so that if anything terrible happens, Couple B is not faced with a long uphill battle against the court system for custody of the child. Without a will, you essentially let the court system decide what to do with your kids and assets, and really, I think that the last thing that most people want. The courts would most likely grant guardianship to a family member, and if that is not what anyone is expecting or planning for, it is difficult for everyone involved. I personally know Couple B, and they would love the child as their own, so why not make it simpler for this transfer of guardianship to happen?
The second red flag in this situation is that raising a child is not cheap when considering food, clothing, school, college, etc. While I know that Couple B is as financially secure as Couple A, that is not the case for everyone. A term life insurance plan for your child can help ease the financial burden in what will already be a horrible situation.
There are many many other reasons to consider estate planning - and there are a lot of really good articles on the web. One of my favorites is this one: Estate Planning for Young Families
We should always hope for the best and plan for the worst - so if you haven't made your plan, DO IT NOW!!! Don't put it off because you never know what could happen tomorrow.
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