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Planning a safety net for the kids

It’s not fun going through this type of planning, but it is necessary for the sake of our children and their best interests.

This week I turned another year older. Last August, we had our fifth (and presumably last) child. These events have prompted some planning.

Last fall I contacted the lawyer that drew up our wills and other legal documents. He sent me the files. Recently, I found them again and have been marking them up with changes.

Though a lot has changed since 2007 when we first made these plans, the basic activities have included the following: We have updated the documents to specifically name all our children. We have changed the list of would-be guardians of our kids. We have changed the list of would-be executors and trustees. As our life perspective has shifted a bit, we have also removed some of the items we thought were great ideas in 2007.

It takes some time to work through this. And, hopefully, we will have to re-do this many more times.

Life insurance

We have also carried life insurance since shortly after we got married. Initially it was a safety net that if something happened to me, Rachael would have enough cash to keep the house or choose to move to a warm sunny state.

Rachael and I both shopped life insurance policies last fall. We have done this every 5-7 years as the experts recommend. We were both extended offers and coverage was elected at levels sufficient to more than cover any real estate debt. This time, we locked in longer term policies.

I have also carried short-term disability insurance for about five years. It’s no secret that one of the biggest risks in farming is an accident. Tax planning doesn’t help the coverage of a disability policy, so it’s not a big policy.

In addition, for a lower premium, I elected coverage for only five years so that I may be ‘re-trained’ for a different occupation. However, being that Rachael is a stay-at-home, homeschooling mother of five, you can imagine how important it is. We figure that the stipend from the insurance in combination with having our land custom or share farmed would keep us going in the case a disabling event were to occur.

It’s not fun going through this type of planning, but it is necessary for the sake of our children and their best interest. In reality, we aren’t spending a whole lot of money for this peace of mind and security.

 The opinions of the author are not necessarily those of Farm Futures or Farm Progress.

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