You Are Being a Bad Parent If…

It’s been a while since I had a clickbaity post title, so I figured it was time. Please forgive me.

All adults, whether they are a parent or not, should have an estate plan. At a minimum, this would include:

• A Will
• A Power of Attorney
• A Health Care Directive

You can create one for free in less than 90 minutes, or you can pay a few hundred dollars and work with an attorney. If you have children, then this is an absolute imperative. Having an estate plan is not about you, it’s about your loved ones (typically a spouse and/or children). If you’ve put it off, for whatever reason, you’re simply being selfish and, yes, you’re being a bad parent. Part of being a parent is making sure your children are setup for success in the future, and that they are taken care of even if you aren’t there. An estate plan is a necessary and critical piece of this and you absolutely must have one. Really. Truly. If you don’t have one, do it now.

In addition to an estate plan, you need to make sure you have designated beneficiaries on all financial accounts named and up to date. While this is not an exhaustive list, at a minimum this includes:

• All Bank Accounts (checking, savings, money market)
• All Investment Accounts (IRA, 401k, 403b, 457b, 529, HSA, taxable brokerage)
• All Life Insurance (including any life insurance you may have through your employer or through your pension plan)
• Your Pension Plan (if you have a pension plan, you almost assuredly have survivor benefits, but you need to name a beneficiary)

If you have designated beneficiaries named, then the Will become less important (but still necessary). All of the financial assets with named beneficiaries will go to your beneficiaries outside of probate. The Will really just determines what happens to your physical property, like your house, car and all the stuff you have stored that nobody wants.

You should also make sure you have the appropriate amount of life insurance. The amount of life insurance you need will vary but, in general, you want enough life insurance that if you were to die today it could replace your income until your dependents (usually children) reach adulthood (typically age 18-22ish). This should be a term life insurance policy, not whole or universal life, and almost always should be purchased on the open market, not through your employer. Certainly if your employer provides employer-paid life insurance, you should take that. And sometimes optional employer-based life insurance plans can be a good deal, particularly if you are uninsurable on your own, but most of the time you will get a better deal (and the appropriate amount of life insurance) on the open market. If you don’t have children, or they are already adults (or near adults), you most likely don’t need any life insurance. (And, of course, make sure the beneficiary of your life insurance is designated appropriately.)

Ideally you will also have a list of all your financial accounts, insurance policies, credit cards, mortgage and other loans, logins and passwords, etc., and the appropriate people will know where to find this list. Providing the means for your loved ones to easily find and access all of your accounts is incredibly important, and particularly helpful when they are under incredible stress and in mourning.

Again, it’s not about you, it’s about them. If you truly care about these people, you will do these things ASAP.