Estate planning is all about preparing for the future—and that means more than just ensuring your finances are in order. It means being certain that the people you love and care for will be fully supported, even if you die unexpectedly. For new parents, there are some obvious implications here. Simply put, if you’ve had a child but haven’t revised your estate plan to reflect that, the time to do so is now!
Estate planning for new parents may seem daunting, but remember: It’s the only way to clarify your wishes about who takes care of your little ones once you pass on, and also to ensure your financial assets go directly to them, without the need for probate court. In this post, we’ll share some do’s and don’ts of estate planning for new parents.
One of the first estate planning basics for new parents is to make sure you have all your documents in order. Priority should be given to key estate plan documents (wills, trusts, power of attorney, advanced healthcare directives, etc.) that map out a course of action in the event of incapacitation or death. Have the papers always ready to ensure a smooth transition, even in worst-case scenarios.
It’s also important to name the person who will serve as the executor of your estate—as well as medical proxies and trustees, as appropriate. These individuals will handle the child’s affairs should you die or become incapacitated. Note that you can pick godparents, grandparents, your siblings—just make sure it’s someone who understands the legal obligations they’re taking on.
You’ll definitely need to name a guardian to take care of any minor children you have, but you may also need a trustee. This is a different kind of role, and the guardian and trustee cannot be the same person, so approach trustee and guardianship selection carefully.
Create and maintain a comprehensive life insurance plan; this secures the child’s financial future. You can work with your estate planning attorney to figure out about how much money is ideal—considering, perhaps, the 20x rule for life insurance. (Make sure to accommodate your own post-mortem needs, too; the last thing you want is to burden your kids with debts from your end-of-life care or from your funeral.)
Finalize all arrangements, papers, and role assignments. Ensure that trustees, executors, and beneficiaries have been chosen. Set final checks for medical and funeral plans where appropriate. Ensure that the child receives the maximum benefit in the end.
There’s obviously a lot to think about—how much money your child might need, who should be appointed as guardian, and which documents you should have in place to cover all your bases. And, there’s no room for error: In a very real way, your estate planning efforts could determine the wellbeing of your kids for a long time to come.
Even so, new parents shouldn’t be daunted—because there’s help available. Estate planning attorneys can work with you to ensure the plans you’re laying are sound ones.
Singh Law Firm has provided estate planning help for new parents across California—and we’d love to help you develop a plan that will offer total peace of mind. Reach out to our team today to schedule an estate planning consultation!