Having your first baby will be one of the happiest times in your life. It will also be a lot of work. Between late-night feedings and baby-proofing your house, you probably haven’t given much thought to logistics like how your new bundle of joy will affect your estate planning goals. The reality, though, is that making financial arrangements in the event that you’re no longer around is one of the best ways you can provide for your child’s future and wellbeing.
How to Protect Your Family
Estate planning can seem overwhelming, especially when it comes to something as important as ensuring the future security of your children. The good news is that, by addressing a handful of basic matters at the outset, you’ll be well on your way. From an estate standpoint, a new child means you have a new beneficiary, and your documents need to be tailored around him or her.
Some of the main things to address after the birth of your child include:
- Your Executor. Every estate has an executor, and it’s possible that, if you’ve already designated one, there’s nothing to change. Just make sure your executor is someone you trust to see that your wishes for your child will be carried out after you’re gone.
- Your Will and Guardianship. Many people think of wills as simply tools to distribute property. For parents, however, one of the most important things a will does is to name a guardian for your child if neither parent is able to assume the role. If you don’t name a guardian in your will, guardianship will be left up to the courts and may be granted to someone you wouldn’t choose.
- Trusts. Trusts are a popular way for parents to provide for minor children. When a parent dies, minors cannot inherit money directly. It must instead be managed on their behalf until they’re of age. With a trust, you can designate who that manager will be and how the money is to be managed. There are different types of trusts, and an advisor can help you choose the best one for your particular situation.
- Health Care Directives. Dealing with end-of-life decisions is hard for anyone, and is not something you want to fall on your young children. With living wills or other health care directives, that burden is taken off their shoulders in the event you become incapacitated. The same is true of specifying funeral arrangements in advance. Making post-death decisions and setting aside money to handle them now will go a long way toward removing unnecessary additional burdens during a time of grief.
- Life Insurance and Beneficiary Designations. More likely than not, you’ll want to name your new trust and/or child as a beneficiary on all your important financial instruments. This includes things like your life insurance policy, your retirement accounts, and your bank accounts. If you didn’t have life insurance before, now is a great time to get it.
No one likes to think about their own death, especially when they’re welcoming a new life into the world. But making the right arrangements now will give you peace of mind down the road and allow you to focus on your new family, knowing that your child will be taken care of even if you’re not around.
Contact a California Estate Planning Attorney Today
The Ledbetter Law Firm, APC, trusted Manhattan Beach estate planning attorneys, is dedicated to helping individuals and families plan for their futures through all aspects of estate planning. Contact The Ledbetter Law Firm, APC to discuss your estate planning needs and any questions you might have about providing for your new family.