If you have a new baby in the house, chances are good that you’re overwhelmed by all there is to do on a daily basis. Parenting isn’t easy, and as any parent can attest, it doesn’t come with a “how-to” manual. Still, in-between feedings and diaper changes, there are some important estate planning steps every new parent should take.
Plan for the Worst-Case Scenario. Let’s face it: If you are human, you are going to die someday. Hopefully that’s when you are old and gray, and when your new baby is already a retiree. Of course, none of us knows when our time will come. When you have minor children, you should plan for a scenario where you and your child’s other parent die before your child reaches the age of majority.
You can nominate someone to serve as physical Guardian for your child if the worst happens. You should also consider creating Trust provisions in your Will or in a separate Trust instrument to provide for management and distribution of assets left to your child, on your terms (rather than on the court’s terms, which is what would happen if you died without having done this planning.)
Review and Update Beneficiary Designations. Any time a major life event occurs (like having or adopting a child), you should review your beneficiary designations. Talk to your estate planning attorney about how to best leave assets to your children. Typically, that involves naming a Revocable Trust or a Testamentary Trust as a beneficiary on things like life insurance and retirement accounts, rather than naming your children directly as beneficiaries.
Plan for Lifetime Incapacity. Finally, new parents should also put legal documents in place designed to give someone else seamless access to your finances and to make health care decisions on your behalf if you become incapacitated. This can ensure funds are readily available to provide for your children’s care and can make a difficult situation, less so.
Estate planning doesn’t have to be difficult, but you do need to take the first step. Contact us today to schedule a consultation to ensure your affairs are in order, no matter what the future holds!