What happens to your children when you cannot care for them?

Apr 9, 2020

I think most of us parents want the best for our children. We think about their safety, health, education and general wellbeing on a regular basis.

But have you thought about what would happen to them if you could no longer look after them?

What would happen to your children if you were to be incapacitated from an accident or sickness?

What would happen if you were to die while they were still under the age of 18?

Who would decide on what would be best for them if you could no longer make those choices?

Few of us like to think about our own vulnerability and mortality, but sadly the Childhood Bereavement Network (CBN) has reported that one parent dies every 22 minutes.

And a government report has revealed thousands of children are placed in care because parents are unavailable or ill.

1. Appoint guardians (in your Will).

Perhaps one of the most important parts of writing a Will is to name guardians so your children are cared for by people you have chosen.

Without defining a guardian, the local authority would be in charge of making decisions around the care and finances of your child.

This would be the case even if a relative has responsibility for the day to day care.

In worst case scenarios, your children could be placed in care.

We believe it is important for anyone with children under 18 to define their guardians to avoid the risk of family disputes, court battles and even foster care.

2. Arrange financial support.

CBN, which has estimated around 24,000 parents die leaving dependent children each year, reported that the bereaved often missed out on financial support.

The last thing someone needs after the death of a loved one is to be worrying about finances. People sometimes receive dangerous advice from well-meaning friends or poorly informed so-called professionals.

We help people work through their options and possible outcomes to better protect their loved ones should something happen to you.

We help ensure the right money goes to the right people and quickly.

If you work for a company, there may be some protection in place and it is worth checking your contract and seeing what is available.

Policies you may wish to consider, particularly if you are self-employed, include:

  • Life Insurance in the event of death.
  • Critical illness in the event of contracting a serious illness.
  • Income protection to provide on-going funds for protracted illness and time off work.

3. Consider Trusts

The team at Kinherit often puts together complex trusts for customers, which are vital for most people – not just the well off.

Did you know your own children could lose out on their inheritance if your partner remarried? Or that your child might have to give away half their inheritance if they divorced?

A trust can help protect future generations from such events. It can also help prevent big bills, such as Inheritance Tax.

4. Store your assets

If you died today, do people know what assets you have? Often the answer is no and this can cause stress, expense and family fallouts at an already difficult time.

On top of this, the value of unclaimed estates in the UK could run into the billions.

Do you want your child to miss out simply because of lost paperwork? Think about how and where you store your assets.

Here at Kinherit we have designed an online vault, to store anything from bank to jewellery details, to make it easy for you to manage.

5. ‘Bloodline planning’

‘Bloodline Planning’ is a way of ensuring your assets reach your children, grandchildren and other relatives, rather than ending up in the wrong hands.

This helps ensure young children and those with special needs are fully provided for.

It takes into account circumstances such as remarriage, children from a previous marriage, the possibility of care home fees and those who run a business with shareholders.

It also looks at the potential for making gifts while you are alive, which can be more tax efficient.

6. Appoint a Power of Attorney

There may come a time in your life when you are unable to manage your financial affairs or personal welfare and you will need someone to act on your behalf.

Even when we are young, we can find ourselves incapacitated due to illness or injury.

In such instances, it can be invaluable having a reliable person manage your personal affairs and remove the anxiety of having unpaid bills.

It is important that you choose who you would like to act on your behalf very carefully. You should choose people you can trust to act in your best interests and that of your child.

How they manage their own affairs may be a good indication of how they will manage yours. It is often a good idea to appoint more than one Attorney to ensure that this power is not abused.

7. Consider the different types of Lasting Power of Attorney

In England and Wales there are a LPA for Property & Financial Affairs; a LPA for Health & Welfare.; a General Power of Attorney.

Without a Health LPA, the local authority would make decisions around your health and wellbeing.

Without a Wealth Power of Attorney, your bank accounts could not be accessed by loved ones, including those which are jointly held.

You would require a court order to access them and this can prove costly and time consuming. You would not have access to potentially much needed funds in the interim.

Kinherit works with people to help protect their loved ones– helping them to avoid unnecessary stress, red tape and expense.

Ben Mason, is the CEO at end-of-life planning firm Kinherit, which provides secure Will-writing and complex trusts. He also heads Futures Protected, which offers insurance to protect people against financial losses in the event of the death or illness. He has 14 years’ experience in financial planning and insurance, as well as detailed knowledge of Wills and Trusts advisory.

Kinherit are offering a free re-write on any Will, Trust or Power of Attorney taken out between now and the end of July 2020. The free re-write can be redeemed at any point up until December 2021. It is hoped this will give the scope to reduce worries about cost when people need to be taking out the right planning today.