Not many life events are as momentous as learning that you are going to be a parent in a couple of months’ time. There is no doubt that your life is bound to change in major ways, and one of the things you need to take care of is your child’s well-being. This is where your estate plan comes in.
Updating your estate plan when you become a parent is crucial because it ensures that your little angel is cared for. So how do you update your estate plan when you become a parent?
Here are two estate planning considerations you need to keep in mind when you become a parent:
Appoint a guardian for your child
Life is full of uncertainties. And one of these involves death. If something happens to you and the other parent, someone else would step in and assume parental care for your child. This is where legal guardianship comes in. You’d rather have someone you know and approve of take care of your child. And for this to happen, you need to designate a guardian for your child in your will.
Set aside an inheritance for your child
Every parent wants to leave a little something for their child when they die. As soon as a new member joins the household, you need to set aside an inheritance for them. Do not assume that your child will automatically inherit your assets when you pass on.
And since your child cannot access their inheritance until they become adults, one of the most important estate planning tools you need to set up is a trust. Besides allowing you to dictate how your child will access their inheritance, a trust also ensures that the assets therein do not go through probate among other benefits.
The birth of a child is a major life change. Find out how you can create or update your estate plan to reflect this life’s milestone.