The chances are that you will have more than enough time to see your children become adults. In fact, you’ll probably see your grandchildren become adults and perhaps even see great-grandchildren arrive. Sadly, however, this is not guaranteed. This is why all parents need to think about how to protect their children no matter what. Here are some tips to help.
Make Sure Custody Is Clear
In Canada, unmarried fathers have the same custodial rights as married ones as long as their name is on the child’s birth certificate. This means that if one parent dies, the other parent will automatically have full custody of the children (barring very exceptional circumstances).
If, however, both parents die, then custody will be decided in one of two ways. The preferable way is for the courts to follow the parents’ documented wishes. The alternative is for the courts to decide custody of your children based on a combination of legal rules and individual judgement.
To be clear, any court will always put your children’s best wishes first. The court’s view of this, however, may not be the same as yours. Even if it is, your children may find themselves stuck in legal limbo while the court process runs. That’s why you need proper, legal documentation setting out your preferred custody arrangement.
If you’re part of a “blended family”, then the situation can become even more complicated. It’s therefore highly advisable to get advice from a family law lawyer as early as possible.
Take Out Ample Life Insurance
Navigating the insurance market can be tough. You want to make sure that you’re not underinsured and to cover all the costs and make the provisions for your children that you consider necessary. However, you also want to avoid paying over the nose, especially for certain cover clauses you may not necessarily need, and this is where an insurance broker can come in handy. Brokers take a look at your finances, your needs, and the risk factors affecting you to help you narrow your choices to those most suited to your particular case.
The younger you are the less it generally costs to take out life insurance. It literally is a small price to pay to know that your children will be protected if either or both of you die. You should both be insured. Even if one of you is a full-time homemaker, the work you do in the home has financial value. If anything happens to you, that will become very obvious very quickly.
If money is tight, then just take out as much life insurance as you can afford. It may not be everything you wanted to give your children. It will, however, be a lot better than nothing. At the very least, aim to put aside enough money to see your children over the immediate financial shock of your death.
Consider Setting Up A Trust Fund
Setting up a trust fund may not be the right choice for everyone. It is, however, definitely worth investigating, especially if you do have significant life insurance, a house or a business. For parents, the main benefit of trust funds is that they allow you to continue to exercise some control over the money you leave behind.
Of course, the fact that you’ll be exercising this control indirectly makes it even more important that you express your wishes clearly while you are still alive. It’s great if you can speak directly to your chosen trustees about what you want from your trust fund. It is, however, still vital that you have all the key points set down in writing so you don’t have to rely on people’s memories.
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