If you have a growing family, there is lots to prepare for and consider. Welcoming a new family member can be a joyous occasion, and requires some planning. Adding a new family member can affect your finances and create a need for more protections. Reassessing your insurance coverage might not be at the top of your list, but policies should always be audited when changes in your family life occur to ensure your coverage will adequately protect your growing family. Remember this: insurance says “I love you,” to the people you love the most.
It’s always a good idea to increase your life insurance coverage whenever you add a new member to your family. Life insurance can provide your loved ones with valuable financial support when you die. Determining the right type and amount of life insurance coverage takes assessing your current financial standing and the future financial needs of your family. As your family grows, future financial needs will as well. Think long-term. Take into account inflation, any expected big-ticket investments, such as education, and the needs of a single parent or named legal guardian, if you pass on while your children are unable to care for themselves.
Always remember that you can name legal guardians to care for the education and health of your children, while directing your insurance to pay to a trust for the benefit of your children, with a separate trustee named to care for the finances. This trustee would work together with your named guardians to make decisions in the best interest of your children, until they can receive and control the inheritance, themselves.
For some, a bigger family means a bigger home. If you are purchasing a new home or building a new addition to your current home, it’s a good idea to reevaluate your homeowner’s policy. Key factors to look for include whether your existing policy has sufficient coverage to repair or replace your home, and whether your policy would replace your belongings. Also, consider adding riders to your existing policy to cover things like damage from natural disasters, which aren’t typically part of standard policies.
You might need a larger or safer car to meet the needs of your growing family. A new car can affect your auto insurance rates, so check with your provider before you make a new purchase to see how your rates may change. Also, some auto insurance providers offer policy discounts for married couples, so talk to your agent about the discounts for which you may qualify.
Parents want to protect their family from the unexpected. Insurance can help provide this protection, but you need to tailor your policies to meet your family’s needs. Periodically review your insurance policies as your family grows to make sure you have optimal protection for what you value most. And, use us to support you.
If you’re growing your family and want to protect your loved ones, consider sitting down with us. As your Personal Family Lawyer®, we can walk you through creating a comprehensive Kids Protection Plan®. Before the session, we’ll send you a Family Wealth Worksheet that will get you thinking about what you own, what matters most to you, and how you want to protect your growing family. Included in this worksheet are steps to take to audit your own insurance coverage.
Additionally, if you are in need of financial or legal assistance (outside of the realm of estate planning) please let us know and we’ll connect you with trusted and well-know professionals in your area with whom we’ve worked before. We know that finding a great adviser can be difficult, and are happy to refer you to other attorneys, CPAs, financial planners, insurance representatives, and tax professionals that will give you and your family peace of mind.
From our family to yours,
P.S. Want to get started on the most important planning you’ll ever do for your family? Give our office a call at (978) 263-6900 to get started. You’ll be so glad you did.
Amanda Mulhall is an Attorney at The Parents Estate Planning Law Firm, PC – a law firm for families in the Acton, Massachusetts area. Amanda helps parents protect the people they love the most.