Everyone wants to be smart about their assets, especially parents with young children who want to feel good about the future and prioritize financial planning to benefit the whole family. There are many ways to manage your income, savings, and investments so they work for you and your children. Here are just some ideas to talk to your financial planner about.
529 Plan
It is never too early to start saving for a child’s higher education. You might not know right now if they’re interested in going to college after high school, but putting money aside for their education, whatever direction it might take, is smart and safe.
A 529 Plan grows with tax advantage savings and can even be used to pay off student loans. Unused funds can be converted to a Roth IRA. Anyone can open or contribute to a 529 Plan for a designated child, from parents to grandparents to friends, an excellent option for multigenerational financial planning.
Estate Planning
Estate planning essentials that every family should have include:
- Last will and testament: Identifies how assets are to be distributed and managed after your death. Also names a legal guardian for minor children, names heirs and a trustee and the will executor.
- Living trust: Allows for the avoidance of probate, the immediate distribution of assets, and ensures privacy. It’s possible to shape and form this document over time based on health and finances.
- Healthcare directive: Addresses end-of-life medical care decisions, instructions, and final wishes. A designated adult representative makes the best choices on your behalf.
- Power of attorney: If at any point you are incapacitated and cannot speak for yourself, a designated rep will do so on your behalf, whether private, business, medical, or financial matters.
Insurance
It is important to have several types of insurance to safeguard your family, self, and home, but what is best for you will vary depending on your circumstances.
- Mortgage insurance: If you were to die, a mortgage life insurance policy pays off the remainder of your mortgage, so your family is not on the hook to make monthly mortgage payments. This type of plan does not cover final expenses, education costs, or childcare.
- Life insurance: The life insurance umbrella is vast, which is why speaking to a financial planner puts you in the best possible position for investing in the right amount of coverage your family needs should something happen to you.
Create a Unique Financial Plan for Your Family
Every family is different and has unique needs, their own assets, and goals for the future. When you visit your financial planner, all the above topics are likely to arise, but this is also a good time to discuss retirement savings, available tax breaks, healthcare costs, emergency funds, and a fun fund so you can enjoy your hard-won earnings and not put all of it in an inaccessible place.
At Hollander Lone Maxbauer, we develop customized financial planning for your life now and the years to come. Schedule a consultation with an experienced financial advisor in our Southfield, MI, office to discuss your family, assets, and hopes. Together, we will develop a path that suits you and your loved ones in the present and future.
