The birth of a baby is a new start and a very exciting, if exhausting, time for new parents. While you are likely to focus on the immediate needs of your child and the near future, bringing new life into the world is a good time to think about the long-term future as well.
Estate planning is one of the smartest things that new parents can do to help protect their children. The careful consideration of your child’s needs now will give you peace of mind for the future and your child protection in case anything should happen to you.
Estate plans offer different protections and benefits, but there are three benefits to estate planning that most new parents can enjoy.
Estate planning lets you name a guardian for your child
If you die or otherwise wind up in a situation where you can’t take care of your kid anymore, they may end up at the mercy of state agencies without planning on your part. You have the option of naming a guardian who will handle your child’s needs if you die while they are still a minor.
You could potentially choose a family member, such as a sibling, or even a close friend to fill this crucial role. When you pick the guardian yourself, you know that the person who will take care of your kids if anything happens to you is someone you trust and who cares for your children.
You have the opportunity to leave financial resources for your child
Losing a parent at a young age will cause emotional and social hardship for your child. It will also increase the likelihood of them struggling financially later in life.
Structuring your estate plan so that there are resources for the guardians taking care of your child when they’re a minor and other assets for when the children become adults can maximize the protections your family has under your plan.
You might consider creating a trust that you fund with your life insurance or even the deed for your family home. The assets in the trust will then remain protected until your children are old enough to access them.
A living will can help your children if you wind up hospitalized
If you suffer a brain injury, wind up in a coma or otherwise become incapacitated while your child is still a minor, having a living will can help them substantially. You could have power of attorney documents that authorize people to pay your bills and take care of your child while you are in the hospital.
A medical power of attorney can authorize an adult to make your medical decisions, while an advance medical directive will make it clear what your preferences are.
Your family may have unique needs due to unusual assets or medical issues, which is why careful estate planning is so important when you start adding new family members.
