Once you become a parent, you typically stop being your own first priority and instead start to consider your child’s needs ahead of your own. While this holds true with regard to finances, housing situations and so on, it also applies to your estate plan. If you have recently become a parent and you do not have an estate plan, now is a great time to create one. If you already have one in place, know that this is a great time to update it.
Typically, today’s young parents want to make sure that their estate plans address at least three key areas. If you are drafting or updating yours, make sure it addresses:
No one wants to think about what would become of their child in their absence, but naming a guardian for your child is an important step that can give you peace of mind if you pass away or become incapacitated. If you do not name a guardian for your child, the court will do so for you, so this is a chance for you to assume more control over your child’s affairs.
Once you have a child, you will probably want to start setting aside assets for him or her. Doing so in a trust, rather than a traditional will, allows you to leave your child some of your legacy without increasing how much tax your beneficiaries must pay after your death.
Powers of attorney
Giving someone you trust power of attorney over your affairs helps ensure that someone acts in you and your child’s best interests should you pass away or become incapacitated. Giving someone durable power of attorney means you give them the right to make decisions regarding your financial and other affairs, while a medical power of attorney does the same with regard to your medical care.
While these are some important steps to take concerning your estate plan once you become a parent, please recognize that this is not an exhaustive list of all areas you may want to visit or revisit.