New parents have a lot of things to think about, as the responsibility of having a new baby doesn’t end with making sure that the little one healthy. For example, if you have an infant, now is the time for you to think about your estate plan.
While estate planning might not be something pleasant to think about, it’s one of the best ways that you can take care of your child. There are several factors that you’ll want to consider as you’re considering how to set up your estate to benefit your new baby.
Naming a guardian for your child
One of the most important things that your estate plan will do is state who you want to raise your child if you and their other parent both pass away. You should name someone who shares your values and will uphold those while raising your child. They should have the ability to care for your children.
It’s a good idea to discuss your wishes with the person who you want to raise your children if something happens to you. This is a chance to be sure they’re comfortable taking on the responsibility and that they’ll ensure that your child is well-cared for.
There are several reasons that parents typically want to put together an estate plan as soon as they learn they will be responsible for a child’s welfare. Why is early estate planning so important for those bringing new life into this world?
Parents can protect their children against the risk of foster care by choosing a guardian and designating authority to them in their estate planning paperwork. A guardian can fulfill a parental role, and taking the time to choose a guardian can make a big difference for a child who has just experienced a very traumatic loss.
Providing Resources for a Child
Parents who die early in life won’t be able to develop their careers fully and provide indefinitely for their children’s needs as they might aspire to do. Those that acknowledge that their children will require financial resources should pass away in the near future will be able to put plans in place to provide for their children. From acquiring life insurance to putting together a trust so that some assets will remain untouched when a child turns 18, there are many steps parents can take proactively to protect the future financial interests of their children.
Providing Guidance in the Wake of Tragedy
If someone ends up incapacitated after a car crash, their estate planning paperwork can provide their children and spouse with information about their medical wishes, ranging from life support preferences to whether they want to make an anatomical gift. The estate planning process can be an emotional one, but it will give parents peace of mind and provide important forms of protection for the children that will soon join their families.
Understanding the benefits of estate planning early when developing a family may allow parents to maximize the protection that their children are in a position to benefit from as a result of their efforts.
Considering financial security
Providing for your child financially is another consideration. You can accomplish this by determining what type of trust can benefit your baby. You should name a trustee who can be trusted to manage the assets in a way that’s best for your child.
Another consideration is passing down your financial accounts, such as checking and savings. These can be passed to a beneficiary, such as your child’s legal guardian, through a Totten trust when you pass away.
These are just a few of the tasks that go into creating a comprehensive estate plan in the wake of having a child. Carefully considering what you want for your child’s future may help you to set up a plan that provides you with the peace of mind of knowing you’re doing what you can to care for them no matter what happens to you.