As a parent, you naturally want what’s best for your child… both in the short-term and the long-term. That’s why you seek the best schools and camps, it’s why you start saving for college tuition, and it’s why you get your child interested in music or sports as early as you can.
Another critical consideration is estate planning. To put it bluntly, you won’t always be around to guide or care for your kids, which makes it critical to put the right safeguards in place. The estate planning process allows you to do exactly that, ensuring that your little ones are set up for success no matter what happens to you.
Estate Planning Tips for New Parents
The thought of estate planning may be daunting, but actually there are some simple steps you can take to put your family’s security first.
Make a Will
Having a will in place is critical for any parent, for one simple reason: A will provides you with a way to name someone who can serve as the legal guardian for your minor children, should you and your spouse or co-parent both die unexpectedly. Don’t assume that your kids will automatically go to their aunt, uncle, or grandparent; rather than leaving their fate in the hands of the court system, be very clear about who you wish to care for them. (And appoint a couple of back-up options if possible.)
Choose an Executor
When you make a will, you also need to name someone to serve as an executor. This person will be tasked with actually administering your estate, ensuring that the assets you leave behind are properly distributed. Choosing a trustworthy executor is crucial for ensuring that your minor children are left with the assets and financial resources you want them to have.
Create a Living Trust
Having a will is a good start, but most families benefit from having a living trust, as well. There are a couple of reasons for this:
- A will does not keep your assets out of probate court, which can create a lot of headaches, hassle, and expenses for your surviving heirs and beneficiaries. A trust provides you with a way to indicate how you want your assets to be distributed without the need for the courts to weigh in, which means your kids and their caretakers will receive the assets you intend for them more quickly and seamlessly.
- Living trusts can also offer some tax advantages, allowing you to preserve the full value of your estate. In other words, a trust can ensure that your children actually reap the full benefits of the assets you leave behind for them.
Consider Health Directives
In addition to a will and trust, your estate plan should also include an advanced health directive. This document provides some insight into your wishes should you become medically incapacitated in some way. Simply put, having this document can spare your survivors (including grown children) from having to make agonizing decisions about your care, ensuring they have peace and clarity about your actual desires.
Buy Life Insurance
It may also be beneficial to purchase life insurance, especially if your kids are quite young. A good life insurance policy will provide monetary resources to make up for your lost income, should you die prematurely. Not only can life insurance position your children for success, but it can also be an important form of support for a surviving spouse or legal guardian. Make sure you talk with an estate planning lawyer about the best ways to incorporate life insurance into an estate plan.
Review Your Estate Plan Regularly
Creating an estate plan is an important first step, but it’s not the end of the journey. It’s also important to make sure you review your plan regularly, and revise it as needed. There are any number of reasons why you might want to amend your estate plan, such as:
- The birth or adoption of another child
- The loss of a child
- A child being diagnosed with special needs
- Changing your mind about who you wish to serve as your child’s legal guardian
- Change in perspective about educational priorities for your child
Talk with an estate planning attorney to learn more about keeping your legal documents up to date and in full alignment with your family’s needs.
Seek Qualified Advice
Ultimately, estate planning can be an important way to protect your children’s future, and to prepare them for success even if you pass away prematurely. Keep in mind that estate planning is not one-size-fits-all, and it’s imperative to develop a plan that’s tailored to your state of residence, your financial situation, and your family’s needs. Talk with an experienced estate planning attorney to get the personalized guidance you need.
Max Alavi APC, OC Trusts Lawyer, contributed this blog post as an educational resource. The material is meant for informational purposes only and not to provide legal advice because laws and regulations may differ across states, and each case may be unique. If you have any questions about the content of this post, it is recommended that you seek advice from a local Estate and Probate attorney.