5 Things New Parents Should Know About Their Estate Plan

by | Aug 10, 2022 | Estate Planning |

If you’re a new parent, this is a hectic time in your life and estate planning may not be the first thing you think of when you wake up in the morning. However, the peace of mind that comes with knowing your child will be cared for no matter what is well worth talking to an estate planning attorney.

1. Who your children’s guardian will be in the case of the unexpected

Making a will is important—not just for financial and support purposes—but also so you can specify who your children’s guardian will be if something were to happen to you. By naming a guardian in your will, you can choose someone who you believe shares your beliefs, values and will raise your children as you would.

Of course, no one wants to think about a scenario where you’re not the one raising your children, but the peace of mind that comes with knowing your children will be well-taken care of is invaluable. This is one of the most important things a parent can do for their children, and it should begin as soon as they are born. Consider the alternative: You don’t want surviving family members bickering over who should raise your children if you can’t, and you don’t want the decision to be left to the courts if you can’t.

2. Whether your children will be financially supported under any circumstance

Similar to choosing a guardian for caretaking purposes, you can also establish a trust for support purposes. For example, a trust allows you to control who manages your assets, how your money and property should be utilized for your children, and when your children should receive a direct financial transfer.

You can name a trustee to handle money on behalf of your children and set a roadmap for how the trustee can use funds to help care for your children as they grow when you create a trust. You can also impose conditions on your children receiving a direct financial transfer, such as needing them to attain the age of 21 or to utilize the funds to pay for college. A trust gives you the flexibility to support your children’s needs—on your own terms.

3. You may want to consider getting life insurance coverage

Life insurance is a way to ensure that your family’s income is protected in the event of your death. If your savings are limited, getting coverage is an excellent way to ensure surviving family members can cover expenses for as long as necessary.

Examine your life insurance policy to see if it can cover debts, funeral costs, living expenses, and even future demands like tuition. When calculating these expenses, factor in the short-term and the long-term costs and the predictable fluctuations that occur naturally during a child’s lifetime.

4. Whether you have a Power of Attorney

Powers of Attorney documents ensure that your affairs can be taken care of if you become incapacitated. These documents can serve many purposes—whether it be for business purposes, your personal financial matters, or decisions related to health care. It’s important to know that your partner or another person has the authority to make decisions in your name, such as signing off on key health-care decisions, paying bills, managing businesses or accounts, and more.

5. A letter of instruction can fill knowledge gaps

You can use letters of instructions or wishes to tell your fiduciary everything they need to know about your estate. Although these documents are not binding, they are an important roadmap and can prove invaluable to your representative in supplying them with useful information as they carry out your wishes.

Contact an Estate Planning Attorney Near You

If you need assistance drafting an estate plan that accounts for your family’s unique needs, contact us. Estate planning becomes especially important once we have children, and the peace of mind is well worth your time. We are experienced California estate planning attorneys who understand the concerns new parents have when estate planning for their new family. We’re here to help.

 

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