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Becoming a parent means you need an estate plan

On Behalf of | Oct 22, 2021 | Estate Planning |

You have a lot on your plate as a new parent. Yet, if you do not set aside time to create an estate plan or update your current one, your child might suffer in the long run from your inaction.

Your newborn is going to rely on you for years to come. You need a plan in case something happens to you during that time. 

What issues do new parents need to think about when estate planning?

If one of you dies, the other parent will take charge, but what if both of you die in a common accident, like a terrible car wreck?  For this, you need to name a guardian for your child.

Choosing a guardian is difficult. You are asking someone to step in at a moment’s notice and replace you as a parent, with all the responsibility that brings. Most people choose family, yet nothing stops you from choosing a close friend if you think they would be more suitable.

However much someone is willing to look after your child, that does not mean they have the funds to do so. Raising a child is costly, so you need to ensure money is available if you are no longer alive to earn it. Consider things like life insurance policies, but take care of who you designate as beneficiaries. Remember your child cannot receive funds directly until they turn 18 years of age.

You can update your estate plan as your child grows older, as your finances change, or as you alter your opinion on who you want to act as guardian. The crucial thing is to put something in place now so that should the worst happen and you and your partner die, your child’s fate is not left to a court to decide.

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