It is never too early to start planning your estate. However, there are certain events in life when an estate plan becomes even more important. One of those events is the addition of a new child to your family.
When you become a parent, one of your biggest priorities will be securing your child’s future. Planning your estate is one of the best ways to do that—not only for your child but your entire family as well.
That said, here are some of the most important estate planning tools all new parents should consider:
A last will and testament
A will is the foundation of any estate plan. This document allows you to:
- Name a legal guardian for your minor children if you and your partner pass away
- Specify how you want your assets distributed among your beneficiaries
- Choose a trusted individual to manage your estate after you pass
These are just some of the basic functions of a will, but they are among the most essential for securing your child’s future. If you already have an existing will, consider updating it to reflect your current circumstances.
A trust
Trusts help manage and protect your assets on your child’s behalf. When you create a trust, you appoint a trustee who will be responsible for managing the trust’s assets.
There are many different types of trusts, but in general, they can provide:
- Financial security: A trust can guarantee your child’s financial security, even after you pass away.
- Control over assets: Trusts give you control over the distribution of your assets. For example, you can choose to release assets only once your child becomes mature enough to handle their own money.
- Avoiding probate: Trusts can help you avoid probate, which can be a lengthy and expensive process.
Trusts can be powerful estate planning tools, but it is crucial to choose those that fit well with your specific circumstances.
A durable power of attorney
A durable power of attorney allows you to designate someone to make decisions and act on your behalf, even if you become incapacitated.
It can help make sure someone can manage your financial affairs if you are unable to, maintaining your child’s stability. Plus, it can include authority to make decisions about your child’s care if you are incapacitated.
It is never too early to start planning
Regardless of how young your family is, estate planning is a crucial step in safeguarding your tomorrow. Consider speaking with an estate planning attorney who can help you understand your options and guide you through the process.