Congratulations. As a new parent you just embarked on the adventure of a lifetime.
Understatement aside, there are new responsibilities attending this new arrival beyond blankets, bottles and (stuffed) bears.
Yep, you must consider and address the care and upbringing of your little one in a world without you and the other parent. What if your child were suddenly orphaned?
And that does not include college costs.
A recent Investor's Business Daily article, titled “When Couples Have Their First Baby, Advisors Deliver,” counsels young couples to consult with an estate planning attorney to address these "guardianship" responsibilities, let alone prepare related legal instruments.
I could not agree more.
Here is the problem: if you do not appoint the backup parents of your own choosing, then by default a probate judge will make the call for you.
Do you really want your crazy sister-in-law (and her sketchy current husband) rearing your kiddo ... just because she "cleans up" better than more responsible family members?
Oh, if she is appointed as guardian, then the judge likely will appoint her to manage the inheritance, too.
If these considerations are not enough to spur you to take action, then I do not know what will.
While you are appointing a guardian and creating a "trust" to manage the inheritance according to your instructions, be sure to address your long-term disability coverage and life insurance.
For example, some otherwise responsible parents believe their employer-provided disability insurance at work would be adequate in the event of a career-killing disability. This may not be enough to keep groceries on the table.
Do I really need to say more about the absolute necessity of increasing your life insurance coverage with a new little one in the home?
[Feel free to contact me for some real life horror stories, if you need additional motivation to get with your life insurance professional without delay.]
As advised in the original article, contact an experienced estate planning attorney to help you protect (and provide for) your family if life zigs when you expect it to sag.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Investor's Business Daily (September 12, 2015) “When Couples Have Their First Baby, Advisors Deliver”