Whether it is your first time or fifth, having a new baby is an exciting and wonderful event. Expanding your family also requires much preparation, such as ensuring you have everything you need to care for the baby and going to doctor appointments.
Although your to-do list may already be very long, one important thing to add to it is creating or updating estate plans. Preparing for emergencies is not just something for older folks. Your sudden incapacitation or death will affect your little one, and you do not want to leave it up to a court to decide what happens to the baby and your assets.
Protect your child’s future
Estate plans help your wishes to come to fruition when you are no longer able to care for yourself or your family or when you pass on. The aspects that are most beneficial when young children are involved include the following:
- Will: In your will, you name the beneficiaries of your assets, outlining who gets what and how much.
- Trust: A trust is an account to which you transfer eligible assets. It offers protection from estate taxes, debt collection and probate. You can create one for your child and name a trustee to manage the trust until your child is old enough to take over.
- Guardianship: The most important question to answer is who will be the guardian of your child if both parents die. As you review options, consider age, health, responsibility, stability, parenting style and religious beliefs. Name a backup in case your first choice becomes unavailable due to illness or death or decides not to take the role when the time comes. You can also name a temporary guardian for brief emergencies.
- Executor: You need someone whom you trust to manage the affairs of your estate and protect its beneficiaries, which includes your child.
Other necessary documents include medical and durable powers of attorney, as well as a living will. With the birth of every child, review and revise your estate plans.