At the Law Offices of Alice A. Salvo in California, we are firm believers in the value of estate planning for all families regardless of their wealth. Why? Because your estate plan is the only way you can ensure that whatever your wishes and goals pertaining to your assets, someone will carry them out for you should you become incapacitated or die.
As Kiplinger explains, one of the times when you should be most concerned about estate planning is when you adopt or give birth to a child. Here are the top five estate planning tips for new parents.
1. Buy life insurance
Taking out life insurance policies on you and your spouse is one of the best ways you can protect your children in the event one or both of you die in a car crash or other unexpected catastrophic event. However, do not name your children as the policy beneficiaries. A minor cannot legally own property in California or any other state.
2. Establish an inter vivos trust
An inter vivos trust is one you establish during your lifetime. You can choose from a number of different trust types with the help of your attorney. You can name your minor children as beneficiaries of the trust since you also appoint a trustee who manages the trust assets and disburses them and their income for the benefit of your children.
3. Make a Last Will and Testament
If you do not make a Last Will and Testament prior to your death, California law determines who inherits your estate. If your children are still minors when you die, this again brings up the problem of minors not being allowed to own property. In your will, however, you can not only specify who you want to inherit from you, but also who you want as the guardian of your children until they become adults.
4. Put assets in joint ownership
It likely is a good idea to have your assets, including bank accounts, investment accounts, real estate holdings, vehicles, etc. titled in the joint names of you and your spouse. This ensures that your spouse will receive these assets upon your death so as to be able to continue providing for your children.
5. Execute a financial power of attorney
You should seriously consider executing a financial durable power of attorney. This legal document names the person who you want to make financial decisions for you in the event you cannot make them for yourself. Again, per your written instructions, this person, called your attorney in fact, can use your assets to continue to provide for your children
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