Taking care of business: your daughter’s finances
Unplannable situations with bad outcomes make unfortunate circumstances even worst. I’m not talking about putting your eggs in your daughter’s good-grades basket so she gets a scholarship due to inability or lack of foresight to save money. I’m talking about an event so catastrophic that it’s impacted your very ability to earn a living. And the money you have coming in either from settlement or social assistance is so paltry, that you have to make a decision on whether to put food on the table or buying new running shoes. If you live in a country with socialized medicine, the pain is easier to bear. But if you live in the U.S., 8.5% of the population or 27.5 million people don’t have health insurance according to a 2018 US Census Bureau report. This is devastating.
It’s not flippant to say that every man needs to have a healthy coverage of insurance. Those on the margins may require even more as they are less tolerant to risk and joblessness is significantly more impactful. We buy home insurance, car insurance, heck, we even buy trip cancellation insurance! But there are still a number of men out there who don’t pay much attention to two things that every man with children needs a grasp on: his insurance and legal positions.
Just like it’s the best time to look for a job is when you don’t need one, the best time to deal with these unfortunate circumstances is when you are not in them. But there are still a number of men out there who don’t pay much attention to two things that every man with children needs a grasp on: his insurance and legal positions. Neither is about you; it’s about her.
Chances are, nothing will happen to you and you’ll live to a ripe old age to see grand-kids. But if you’ve been brought down by a pandemic; suffered an automobile accident; or have preexisting health conditions, don’t be one ambulance ride away from the poor house. This does your family no financial good and your daughter’s egg nest will have a deeper bottom to start from. Insurance isn’t about you; it’s about her. Setting aside life policies, there are generally two kinds of insurance to consider: health/medical and short/long term disability. The first will get you in an out of the hospital with a good drug plan. The second covers your cost of living if you cannot return to work immediately or permanently. With the exception of unplanned death, on-going disability is the most ruinous. Most employers provide some coverage of both and give the employee (the co-payer) an option to top-up for realistic coverage that includes COLA or cost of living adjustments. This is especially important since the monthly payout today will buy much less 20 years from now, so you want your payments adjusted or indexed to inflation. Without seriously considering this, your family and especially your daughter may need to forgo her college dreams as she may be required to care for your chronic condition if you cannot afford professional home care.
I’m like most of you guys out there: in the prime of my life and the going is good. I almost think I am invincible, again. But the reality is that things can change in a split second and you never know when it can happen. Just like it’s the best time to look for a job is when you don’t need one, the best time to deal with these unfortunate circumstances is when you are not in them. Ask your lawyer for help in putting together a living will; not just a will. The latter talks about who gets your stuff when you die. The former talks about who can make decisions when you cannot. I have the good fortune of having siblings and they are the executors of my Power of Attorney so that my family will continue to have access to my daughter and my assets have oversight for my daughter. The alternative is that assets are either frozen or disbursed at the dictates of my daughter’s other legal guardian: the ex-wife. A childhood friend of mine whose divorced father died before we even entered high school was left with sizable assets but didn’t have a will. His divorced mother was the default guardian and was extremely uncooperative, tying the whole process up in probate. It didn’t end well for anyone except the lawyers.
Taking care of business is especially important and it means leaving clear instructions to deal with your matters for the benefit of your daughter. If you thought you and your ex-wife have words while you’re alive, imagine what will happen when you’re not or unable to counter her plans to undermine your estate? In most jurisdictions, grandparents have no rights, much less aunts and uncles. So protect your daughter financially and legally. Divorce was the easy part.
