Essential Estate Planning for New Parents
When you’re a new parent, there are a million things to think of and plan for and you are constantly preoccupied with your baby’s health and well-being. Chances are, completing your essential estate planning for new parents isn’t on your mind. But, this is something that should be a priority for all new parents to prepare for the future and all those scary “what if?” scenarios.
Although this isn’t pleasant to think about, it’s so much better than if the worst-case scenarios happen and you are not prepared at all. Here are three types of estate planning you should care about as a new parent.
1. Appointing a Guardian
In the event that you can’t take care of your child anymore, you’ll need a guardian and it’s important to appoint that guardian sooner rather than later. You should choose someone that you know will have your child’s best interest at heart, whether that’s a family member or a close friend.
Whoever you choose should be someone both parents agree on, but you should also remember that the decision isn’t yours alone. Being a guardian is very different than being present for your child’s key life moments and buying them gifts on their birthday. It is a serious commitment that should not be taken lightly. Sit down with the person you’re thinking of making a guardian and have a serious discussion with them about whether or not they would be willing to take on the responsibility. If you sense hesitation, they may not be the right choice for a guardian.
Unfortunately, even if you appoint your guardian, a court could choose to overrule your choice if they think it won’t be in your child’s best interest. This is another reason why it’s so important to make this choice carefully.
2. Choosing a Trustee
While a guardian is responsible for your child’s general well-being, a trustee is specifically responsible for making financial decisions for your child until they are financially responsible. This duty may last even after your child turns 18. Some of the trustee’s responsibilities include:
Paying bills on your child’s behalf
Making investments for your child
Distributing funds to your child
Filing income tax returns on your child’s behalf
The trustee will continue fulfilling these obligations until whenever your child can be trusted to sensibly manage finances. While the court might overrule your choice of guardian, they likely won’t change who you’ve appointed as a trustee.
3. Updating Your Life Insurance Policy
You want to make sure your child would be financially taken care of until they’re an adult if you were to pass away while they’re still young. While you may not have the funds in savings right now to carry your child through their high school graduation, life insurance can help. That’s why it’s essential for you to review your life insurance policy immediately. If either you or your partner is uninsurable, the one who can obtain insurance should apply.
It’s important to not just choose whatever policy could replace your current income. Instead, you should carefully consider how much your family would need if you passed away. Also, think about how long they would need the money to determine if term insurance or permanent insurance is better suited to your situation.
Choose Your Estate Planning Law Firm Wisely
While all three of these actions are important, this certainly doesn’t cover all the estate planning for new parent necessities. To ensure that you’re covering all your bases, work with a law firm you know you can trust. Rilus Law would be happy to help you prepare for the future and your peace of mind. Protect your family’s future by contacting us today.