Many parents don’t realize that the laws of North Carolina do not automatically protect their minor children if something happens to the parents. One consideration is physical custody of your children. If both parents die at the same time and no guardian has been identified, the court may appoint a guardian or place the children in foster care until other family members can be evaluated as suitable guardians.
Another consideration is the protection of your family’s financial wellbeing. With no will in place, North Carolina law requires that your assets be divided between your spouse and your children, which may actually limit your spouse’s ability to care for and provide for your children if some of your assets and funds get tied up in reserve for your children. This is why estate planning is so important.
How can you protect your children best? Careful estate planning will allow you to determine how to best protect them and care for them, even in the event of your untimely death. Here are some of the key components of effective estate planning in North Carolina:
- Will: This legal document outlines how your assets will be divided after your death, who will manage the process, and how any disputes will be settled.
- Guardianship: This is a key consideration if you have small children. Who will care for them if something happens to you?
- Trusts: Setting up a trust avoids some of the legal roadblocks and court oversight of your children’s inheritance. It ensures that your children’s guardian has access to the funds needed to pay for medical care, education, and other expenses.
- Life insurance: There are many types of life insurance, but the goal of all life insurance is to provide money to your loved ones in the event of your death. It can also pay off debts.
- Medical directives: There are situations in which a parent is injured or incapacitated, but still alive. A medical directive informs your family of important decisions and preferences in this situation.