New parents should priorities estate planning.
Your life has changed.
You just had your first baby.
You have gone from a couple to a family of three.
You are feeling excited, happy, and a little scared.
How do you rear this little blessing to adulthood?
Trust me, having been there and done that with three daughters, the time makes a swooshing sound as it goes by.
According to a recent ThinkAdvisor article titled “5 Legacy Planning Basics for New Parents,” setting your child up for success involves estate planning.
How do you do this well?
Create a will.
Within a will, you can designate a guardian to rear your minor child, if orphaned.
You will want to select someone who would rear them according to the same values and with the same care as would you and your spouse.
In a will, you should also name an executor to handle your estate after you pass away.
Her role as a fiduciary is to ensure that all of the probate matters (e.g., settling your debts, taxes, and expenses) are handled according to Hoyle.
You also should consider who is to receive what from your earthly estate.
Name beneficiaries.
You want your will and the beneficiary designations on your retirement plans and life insurance policies to work together.
Remember, beneficiary designations overrule what is stated in your will.
They will pass directly to the named beneficiaries and bypass probate.
Consider a trust.
Not everyone needs a trust, whether it is a revocable living trust to manage your assets while you are alive or an '"inheritance trust" to manage them for your heirs.
For some, it can be a great estate planning tool
If you have minor children, you can provide for them while also setting guidelines for the use of the funds, such for educational expenses and "first" weddings.
You can also setup payments to be made when your children reaches certain ages or milestones.
A trustee will oversee the trust and follow the provisions you made.
An added benefit of a revocable living trust is keeping the funds out of probate proceedings.
Set up a General Durable Power of Attorney and an Advance Health Care Directive.
If you become incapacitated you will need these two documents.
These allow designated agents to make financial or health care decisions on your behalf should you be unable to do so yourself.
Get a life insurance policy.
When you have children, you are financial responsible for a very dependent human being.
Make sure you have life insurance so your little one is provided for should you die.
Bringing a new life into the world, whether by birth or adoption, brings unmeasurable joy.
Protect your baby through appropriate estate planning.
Reference: ThinkAdvisor (March 7, 2019) “5 Legacy Planning Basics for New Parents”
Comments