The arrival of a new child into a family inevitably causes parents to rethink their approach to any number of pressing concerns. Among these considerations should be the creation or revision of an estate plan.
While it may seem morbid to think about estate planning at such a joyful time, it’s a critical step in securing a child’s future should the unthinkable happen.
What needs to be addressed?
Perhaps the most pressing reason for new parents to have an updated estate plan in place is to designate a guardian for their child in the event of their death. Without a clear directive in a will, the court will decide who will raise an orphaned child, which may not align with the wishes of the parents who have lost their lives prematurely. If you’re a new parent, know that taking the time to select a guardian can help to ensure that your child is cared for by someone you trust and who shares your values and parenting style.
A current estate plan also allows parents to outline how their assets should be managed and distributed to provide for their child’s upbringing, education and future needs. Trusts can be particularly useful in this regard, offering a way to allocate funds for specific purposes, such as college tuition, while potentially avoiding the probate process.
And finally, beyond the practical aspects of financial and guardianship decisions, an estate plan allows parents to leave a personal legacy. This can include letters, values and memories that they may wish to pass down to their child, ensuring that their influence endures even in their absence.
While it’s uncomfortable to contemplate your mortality, creating or revising an estate plan can help to ensure that your child will be cared for according to your wishes, no matter what the future holds. As a new parent, you owe it to yourself and to your child to make this effort, even though doing so may be tough. Know that seeking legal guidance is always an option and may help to ease the stress of the process.