Estate Planning Essentials for New Parents

Becoming a parent brings a whirlwind of joy and responsibility. It can be hard to think about life’s uncertainties. However, making sure your child’s future is safe is very important. Proper estate planning helps ensure that your children and assets are protected according to your wishes.

Create or Update Your Will

If you haven’t written a will or updated yours since your child was born, it’s smart to act now.

A will is an important legal document. It explains how to distribute your assets. It also names who will care for your minor children if you die. Without a clear plan, the court will decide these matters, which may not align with your wishes.

Additionally, state laws vary when it comes to asset distribution. If you die while married, your spouse may automatically get everything. This can affect children from a previous marriage.

Having a well-structured will ensures your estate is handled the way you intend. If you and your spouse both create wills, naming the same guardian for your child can help prevent legal disputes down the road.

Establish Power of Attorney and Healthcare Directives

Life is unpredictable, and having a plan in place for financial and medical decisions is crucial. Think about choosing a financial power of attorney and a healthcare proxy. They can make decisions for you if you cannot.

If you and your partner aren’t married, these documents are even more important. Without them, your partner may not be able to make decisions for you. This could happen during a medical emergency or a financial issue.

Review and Update Beneficiaries

Any major life event, such as having a baby, requires you to check your beneficiaries. This includes your financial accounts, retirement plans, and life insurance policies. These designations are more important than instructions in a will. It is key to make sure they match your current wishes when planning your estate.

Consider Trusts for More Complex Needs

For families facing financial challenges, establishing a trust can be a strategic way to manage and distribute assets effectively. A trust is a legal setup.

It lets a person, called a trustee, hold and manage assets. The trustee does this for beneficiaries, like children or family members. This setup can give a feeling of security. It helps control how family members use and share money.

Bottom Line

Talking to a financial advisor or estate planning attorney can help you find the best plan for your needs. This can also give you peace of mind that your family’s future is safe.

Sources:

https://www.fidelity.com/learning-center/life-events/wills-and-estate-planning-for-parents/

Disclosures:

This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.

This material is provided as a courtesy and for educational purposes only.

These are the views of the author, not the named Representative or Advisory Services Network, LLC, and should not be construed as investment advice. Neither the named Representative nor Advisory Services Network, LLC gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.