Planning for the future is not always top priority for young families. When you’re wrangling a toddler, planning beyond next Tuesday can feel like an exercise in futility. Estate planning, however, means that if anything happens to you, your family is protected. Having basic documents in place may be able to help you minimize or avoid probate entirely for your family. Without an estate plan, you don’t control how your assets will be distributed, or who will care for your children. Here is an estate planning checklist that every young family should consider to ensure that their wishes regarding their children and assets are documented and followed.

1. Assess Life Insurance Needs

A good place to start is with life insurance. If you passed away today, would your family be able to cover all the monthly bills? Would there be extra money for unexpected expenses? Would your children have enough money to be able to attend college someday? Obviously, you want your family to be able to make ends meet if something were to happen to you. Start by assessing your family’s monthly bills and long-term financial goals to determine how much life insurance you need. Then, figure out what type of insurance policy will meet those needs.

2. Determine Whether You Need a Will, a Trust, or Both

Basic Will

A will is a public record, and accessible to anyone. For many young families, a basic will may be enough to adequately protect your family should anything happen to you. There are several things that you can designate in a will:

Name a guardian for minor children
Determine asset distribution
Appoint an executor or trustee for your estate

While a will is relatively easy and inexpensive to set up, your estate will probably still have to go through probate. In probate, your assets are held before distribution, sometimes for months. It also means that your creditors and any attorney fees will be paid before any money passes through to your heirs.

Trust

A trust, in contrast to a will, is a private document that keeps your affairs out of the public view. A trust may work better for those who have real property — houses, land, businesses — that would need to be transferred upon death. Setting up a trust is a bit more complicated and more costly than a will, but it allows your estate to avoid probate and have your assets pass directly to your heirs, per your directive. A trust does not allow you to appoint a guardian for minor children though, so even if you set up a trust, you still may need a will to designate this.

3. Consider Other Documentation

Durable Power of Attorney gives an individual the ability to make decisions for you should you become ill or incapacitated in any way.

Medical Care Power of Attorney or a Healthcare Directive appoints someone of your choosing to make healthcare related decisions for you, should you become ill or unable to otherwise communicate your desired healthcare treatment.

4. Create an Asset List For Your Executor or Trustee

A good rule of thumb is to have everything organized so that your executor or trustee can more easily manage the distribution of your assets. Organized documentation will help your executor or trustee finalize financial and legal arrangements in a timely fashion.

Real assets: House, car, boat, etc.
Monetary assets: Investments, savings, etc.
Retirement accounts
Insurance policies

Make sure that your executor or trustee knows how to retrieve these documents in the event that they need to fulfill that role.

5. Review Your Documents Regularly

Over time, there may be things you need to change or add to your estate plan. It may even become necessary to implement a trust, change beneficiaries, or name a new executor or trustee. You don’t need to review your arrangements every year, but you should review every three to five years, even if you don’t experience major life changes during that time. You should also review your arrangements any time you experience a significant shift in your circumstances, such as a change in marital status, a new child, or a change in ownership of a home or business.