Being a new parent is so exciting. It is a time of overwhelming emotions and new responsibilities. Adulting is suddenly taken to a whole new level when you realize there is a tiny human depending on you for the next 18 years or so. In that moment, you have an epiphany. You realize you need a new plan for life…and beyond. You realize that you need an estate plan.
Estate Planning
As parents, we want to secure the future of our children. There are so many worries and “what ifs” as a new parent that thought of the future can consume you. Designing an estate plan for the physical and financial well-being of a new baby is one of the most important parental responsibilities. There are a few important steps for new parents to begin establishing this plan:
- Guardians and Trustees – This topic should be the number one item to consider when beginning your estate plan for your child. Who will care for your child/children if you should leave this world all too soon? This is a discussion that should take place with your partner to choose a designee. An attorney who practices estate planning can assist you in exploring all the considerations around such an important question.
- Future Education Plans – An educational trust or a 529 plan can help you reap some tax benefits while securing the educational future of your little one.
- Last Will and Testament – As a parent, you may automatically assume that all of your assets will pass to your child upon your passing. If your child is under the age of 18, assets cannot be legally passed to a minor. An estate planning attorney can assist you in establishing a trust for your child. The attorney can also help navigate choosing an appropriate trustee to manage your assets until the child is of age.
- Beneficiaries and Important Documents – Do not forget to update your beneficiaries on your life insurance documents or retirement accounts. This should be an annual habit to ensure that all the information is up-to-date. You certainly do not want negligence on your part to detract from your estate plan for your child. Other documents to consider are power of attorney, medical directives, and any additional wishes for your well-being.
Next Steps
Estate planning is necessary for your new family. Before parenthood, you may not have been worried about estate planning. Now that you are a new parent, this should be at the top of your life. Estate planning when you are a parent, basically allows you to secure the future of your family.
In summary, new parents should create an estate plan that includes a will, power of attorney, medical directives, and any guardianship wishes. You should also choose a trustee to oversee any assets for your child.
This process can be daunting for a new parent, but an estate planning attorney can help you. A skilled professional can ask you the right questions to develop a personalized plan to protect your assets, as well as, your family’s future.
