But if anyone does not provide for his relatives, and especially for members of his household, he has denied the faith and is worse than an unbeliever. – 1 Timothy 5:8
A father generally helps with managing household expenses, either directly or indirectly. Indeed, the main breadwinner in a lot of cases. This construct may work well now, but what if something were to happen to him? Would your family be financially okay? As we celebrate Father’s Day, dads might want to consider the following steps to ensure your family is protected:
- Ensure you have adequate life insurance coverage. You don’t want your family to struggle to pay the bills and put food on the table without your income, but many employees only have enough life insurance to cover a year’s worth of salary. This may be enough for some families to readjust, but in other instances, if a mortgage is involved, your spouse may struggle with mortgage payments on their own. Furthermore, if they are unwilling or unable to sell the home, you might want to, at minimum, make sure you have enough life insurance to pay off the mortgage. Even that might not be enough. You can speak with a financial advisor to estimate how much more (if any) you should buy to cover your family’s needs.
- Keep your beneficiaries updated on pension accounts and life insurance policies. Opening a pension account or insurance policy may have been done hastily years ago, and the beneficiary would have changed because of a new status. This could lead to an inequitable distribution of your assets, especially if you have multiple children outside of the nuclear family structure. If not properly structured, there are bound to be issues.
- Add beneficiaries to your other assets. You can generally add beneficiaries to bank and investment accounts, saving your children the time and cost of probate. Discuss with your financial institution this likelihood based on the eligibility age of your heirs.
- Make a will or create a trust. Unfortunately, you can’t add a beneficiary to everything, including your children. While you may not mind having the court decide who’ll inherit your property, you probably don’t want them deciding who will raise your children. Being able to choose their guardian if something were to happen to both of their parents is often overlooked, despite being one of, if not the most, important things the will does. On the other hand, creating a trust may be another option, albeit more expensive than a will, but it can be worth the cost if you have a complex financial or family situation. If you have taxable estates, properties in multiple jurisdictions, a child with special needs, or a will that may be contested, hiring a lawyer to draft a trust is recommended.
- Get your spouse financially educated and involved in financial decisions if they aren’t already. Talk about and review your finances with your spouse. At the very least, introduce them to any financial professionals you work with, like a financial advisor, accountant, or insurance agent, so they’ll have a relationship with someone they can trust to help them figure things out in the event of your untimely passing.
As a father, you may feel a special responsibility for the financial well-being of your family. I submit that part of that responsibility is making sure your family will be protected even if you’re not around to fulfil it.