Many people don’t choose to put together an estate plan until they feel they have assets of a significant value or that they have beneficiaries who could lose out if they don’t.
If you are a new parent who doesn’t yet have an estate plan, then it’s time to sit down and think about starting one. Estate planning isn’t just about you. It’s about creating a plan for your children and family, so that they can be cared for and taken care of if you are unable to be there for them in person.
Whether you fall ill or you pass away, an estate plan can help protect your best interests and those of your children.
Your estate plan names a guardian for your child(ren)
If you don’t have an estate plan yet, then there is no plan in place to describe what happens to your child or children if you and your spouse pass away. If your spouse passes and you’re the only parent still living, it’s even more important to have a guardian assigned in your estate plan.
The first step of this process is to put together a will that names a guardian, like one of your family members, who will take over caring for your child or children if you cannot. They, the guardian, will raise them in your stead.
You should also appoint a trustee. This trustee will handle your child’s or children’s finances, assets they’ve inherited or their trusts. The guardian and trustee can be the same person, but you can also choose different people to fulfill those roles.
What if you don’t have a guardian assigned when you pass away?
If no guardian is assigned in your will, then your child or children may go to live with someone in the family that you would have preferred they didn’t. They may also end up going into foster care if no other party that you know is willing to take over their care. That’s something to consider and one of the most important reasons to start your estate planning as soon as you have a child on the way.