THE BLOG

Parents: Are You Prepared?

08/21/2013 12:42 pm ET | Updated Oct 21, 2013
  • Neale Godfrey Author, mother and Chairman of Children's Financial Network, Inc.

You're young, healthy and happy, and you're busy with career, family and home. Let's face it, you're in the prime of your life, and probably feel like you're going to live forever. I'm sure you have made statements like "We need to get a will someday." Or, "I have some life insurance from work, that should be enough for now." How about: "My sister would certainly take care of the kids if anything happened to us?"

If you don't have a will, you're not alone. Nobody likes to think of all the negative scenarios that could interrupt or significantly change our lives, but we have to -- especially if you have children. Fifty percent of Americans with children do not have a will. Forty percent of adult Americans have no life insurance at all and over 50 million people in the U.S. have inadequate coverage. Now is the time to get your affairs in order.

Before you can get to your wills -- and yes, you each need your own will -- you have discussions, planning and business to take care of.

Insurance
Make sure you each have enough life insurance so that the surviving spouse could afford to live and take care of the children through college. Consider mortgage and any other outstanding loans, childcare, housing, funeral and other routine and necessary expenses. Remember, you have to cover the loss of a salary for a long time. If your spouse doesn't work outside the home, you still need to figure the cost of childcare, etc., if you were to lose that spouse.

Information List

  • Assets
  • Prenuptial agreement
  • Financial advisors and insurance agents
  • Life insurance policies
  • Mortgage and deed
  • Business partnerships and agreements
  • Last three years of income tax returns
  • Social Security numbers for you and your children
  • Emergency contacts
  • Final wishes: memorial services, burial, other special requests and how much this will cost. My grandmother, Grandma Jewel, went the extra step to leave a list of people she did and didn't want at her funeral.

Legal Guardian
After you have agreed upon the person you would want to raise your children if tragedy took you and your spouse, you have to discuss your decision with that person. If that person agrees to take on the responsibility, you need to talk about how your kids would be raised.

  • Is there enough room for the guardian to house your kids? If not, you have to set aside enough funds, or leave an extra insurance policy to cover the cost of upgrading.
  • Specify the religious upbringing you want for your kids.
  • Be clear about a continuing relationship and visitation with your surviving family.
  • Who will manage your children's property?
  • Have a conversation with the kids
Beneficiaries Usually each spouse will leave the bulk of the estate to the surviving partner with the children being the alternate beneficiary in the event that both spouses die together or one has predeceased the other. You can also leave designated items to specific people, such as a piece of heirloom jewelry to a family member.

Executor
You must name someone to carry out the terms of your will, that person is the executor. Be sure to discuss this decision with the person you have chosen. Being an executor is more than an honorary position and can involve quite a bit of management and oversight. The person you choose should be comfortable with the responsibility.

Surrogate Proxy
What happens in the event that you are unable to make health and money decisions for yourself? Decide whom you will entrust with that power and have your lawyer draw up the papers to designate your legal Power of Attorney. You retain the executed document until such time as it is needed.

Discuss your wishes and concerns with the pros -- insurance agents, financial advisors and lawyers will help you make your decisions and take care of the legalities.

This may seem like a daunting project, and the topic may be dour, but it is imperative that you plan for the safety and future of your family. It's easy to procrastinate and convince yourself that tragedy is something that happens to other people. I have even counseled people who used superstition as an excuse. Making sure your family will be secure is a wonderful expression of love.

If you have any experiences you would like to share, please use the space provided.