Protecting Your Most Precious Asset
Americans tend to drag their feet when it comes to estate planning. Only 36% of adults have a will, and the numbers are even lower for young adults. For example, among adults aged 35 to 44 — an age when many people have accumulated substantial assets — only 20% have a will to help ensure that their assets are distributed according to their wishes.1
Protecting material assets is important, but protecting your children — your most precious asset of all — is even more important. Yet only 49% of married parents and 17% of single parents have a will.2 People cite various reasons for not creating a will: procrastination, a lack of urgency, or because they don’t think they need one.3 If you have minor children, however, you need a will regardless of any material assets you may possess.
Naming a Guardian
A will is generally the simplest and most appropriate way to select a guardian for minor-age children and adult children with special needs. If you do not select a guardian, a probate court will select one for you, and your child’s financial matters might be managed through the court. A legal guardian can provide daily care as well as financial oversight, but you may name a different person as custodian for specific accounts.
It’s usually not a good idea to name a minor child as the primary beneficiary of a retirement account, pension plan, or insurance policy, but it may be appropriate to name children as contingent beneficiaries as long as you also specify a guardian or custodian. Beneficiary designations on such accounts typically supercede instructions in a will, so be sure that the guardian/custodian you name on the beneficiary form corresponds with your will unless you want the account assets controlled by a different individual.
Creating a will does not have to be expensive or complex, but it could make a big difference for your children and other heirs. If you already have a will, you should review it regularly to make sure it reflects your current wishes.