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NJ readers can follow couple's inspiring example

People might think that only senior citizens are in need of estate planning to handle their assets upon their deaths. This is a common misconception for many Ocean City residents.

Parents of young children are a perfect example of those who would benefit from estate planning. When parents work to financially provide for their kids, they must consider the best ways to save for short-term and long-term costs. There are immediate expenses such as food, clothing, and daycare. There are long-term expenses such as college tuition and room/board.

Parents with the financial means to put away money for their children's futures have to divvy up their funds to stock up their college savings plans as well as their own retirement funds, but also they must consider how their kids will be supported in the event of their deaths.

In the case of a Morris County couple with over half a million in savings and various retirement plans, there is a question of whether the wife can afford to leave her job. This would require and the family to survive financially on the husband's salary. While this is a legitimate concern, it is also important to reevaluate what other factors would be impacted if she no longer worked.

There is also the matter of how their household would be supported upon their deaths.

Many companies provide term life insurance for their employees. For this couple, the wife would lose her company provided policy that would pay out $250,000 in the event of her death. She has another term life policy for $1 million. If she were to die, the household would still be able to function on just the husband's income.

However, if the husband were to die first, a different scenario comes into play. In the event of his death, an additional $260,000 would have to be made up in order to cover the loss of his future wages. In this case, it would be beneficial if the couple opted for an additional life insurance policy for the husband. The same holds true if the husband became disabled. In that case, a long-term care insurance policy is recommended.

In addition to retirement planning and a reevaluation of the life insurance policies, it is also recommended that couples with young children make sure that their estate plan includes will that provide a designation of guardians for their children.

No one wants to spend time contemplating death and estate planning is one of those topics that forces couples to review the "what if" scenarios of life. An ounce of prevention for this couple can save them a lot of unanticipated financial hardship.

Source: NJ.com, "Morris County couple with two young children looks for a path to early retirement," Karin Price Mueller, Mar. 4, 2012

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