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Estate Planning for New Parents
There is nothing more exciting than becoming a parent and, yet, the moment is not without its complications. Such huge joy brings huge responsibility. All of a sudden, a new life depends on you for love and protection. Updating your estate plan in consideration of this enormous event is an important step that should not be overlooked.
Essential Documents for Families
Most single adults will, if anything, have only their advance directives in place. Couples without children might, in addition, have a Will or trust that makes sure their assets go to the right people in case of their passing. When children arrive, a number of key new documents are needed to ensure the whole family is covered by your estate plan. These include:
- Updated Will, Trust, and Beneficiary Designations
A Will does more than just designate who will inherit your assets. It can also designate a guardian to your children should something happen to you and your spouse or co-parent (should you have one). This is a big decision that you do not want left up to the courts.
Beneficiary designations should also be updated to reflect your growing family. Not only is this true of your Will but of any accounts, trusts, and life insurance policies you might have, as well.
If you don’t have a trust or life insurance policy, don’t worry, those are next on the list.
- Life Insurance
With the matter of guardianship settled, ensuring your child will have enough to live comfortably (no matter what happens) is the next task that needs your attention. Usually, this means investing in a life insurance plan and designating your child as the beneficiary. This is especially important at a time when a global pandemic is threatening everyone’s well-being.
Choosing the right plan involves a range of considerations and so it helps to seek an experienced estate planning attorney’s input. You can do this at the same time as you update your Will and other documents as an attorney is needed for that, too.
- A Testamentary Trust
If you die before your child turns 18, they will not be able to receive any inheritance directly. This can lead to complications in court. What’s more, without any controls in place, your child could end up inheriting a no-strings-attached lump sum upon reaching age of majority. A testamentary trust addresses both of these worries.
By designating a person to manage assets on behalf of your child and by including instructions on how these assets should be distributed, you ensure your child’s needs are met without running the risk of financial mismanagement.
As already mentioned, an experienced estate planning attorney is your best resource for attending to these important tasks. Not only will they ensure all documents are properly drafted, they will also take care to set up a plan that works with your individual financial situation and family needs.
If you are a new parent thinking about how an estate plan can protect you and your loved ones, do not hesitate to call our office at (936) 301-0111, email us at firstname.lastname@example.org, or contact us through our website.