The joys of parentingIf you have children, update your will to nominate a guardian to step in if you and your spouse pass away. "Also include provisions in your will or a separate revocable trust so that your child doesn't inherit everything at the age of 18," says Hamill.
"A revocable trust allows you to appoint a trustee to handle any money your child inherits. The trustee can use it to support your child as the child grows up, and you can specify at what age your child can receive the money, along with any reasons your child should get it before that age, such as starting a business or buying a house. You can also specify that the trustee can withhold money if your child has a gambling problem, is in the midst of a divorce, or there's another situation that makes it inappropriate to inherit."
You'll also need a separate guardianship nomination -- sometimes called an emergency guardianship proxy -- that nominates a guardian to care for your child if both parents are incapacitated, says Hamill. That's helpful in simpler situations as well, such as when both parents take a vacation and a child needs emergency medical treatment.
Each time you have another child, be sure your estate planning documents address all of your children, and don't forget to increase your life insurance. "You need about $1 million to care for a child from birth to college," says Cheong. "Also, if you have a special-needs child, set up a special-needs trust, which allows you to provide for your child without disqualifying the child from government benefits."
Sing it, Tammy Wynette: D-I-V-O-R-C-E"If you're separating or divorcing, you probably don't want your spouse to still have all the authority to make decisions on your behalf and access your medical and financial information," says Hamill. "Revoke those documents, including beneficiary designations, or sign new ones. A divorce decree doesn't magically change those things."
If you remarry, revise your will and trust documents to reflect the proper beneficiaries. "Most people want to share with their new spouse but also want to provide for their separate children at their death," says Hillary Gagnon, an estate planning attorney with Jennings, Haug & Cunningham in Phoenix. "Determine which assets you want to leave to your spouse and which to leave to your children."
The middle agesAs you reach your 40s and 50s, says Hamill, consider purchasing long-term care insurance, which covers the cost of long-term care or a nursing home.
The golden yearsReview your life insurance to determine whether you can reduce it if your children are grown. Also review designations on your durable power of attorney, health care proxy, and HIPAA release to be sure the people you've named are still in your life and willing and able to serve in that role. "A lot of people at this stage," says Hamill, "also start planning their funeral to make sure that's in order."
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