Estate Planning 101: 5 Lessons for New Parents
A new parent has a plethora of new tasks when it comes to that new baby or child: feeding, cleaning, bathing, and the all-consuming daily tasks that now take over one’s life. It is important, however, to have the wherewithal to make a plan for that precious child’s future.
- Set up “Living Documents
- By naming a proper health care proxy and executing a power of attorney, a parent who becomes incapacitated can ensure someone else can access their funds for their child’s needs and make proper health care decisions for the parent in the interim.
- Decide on a Guardian or a Trustee
- Both have different responsibilities, but depending on the circumstances, having one or both can be necessary for your plans for your child.
- Establish Post-Mortem Documents
- Creating a will and possibly a separate trust document early in the child’s life can alleviate a large amount of stress. If creating both seems too complex, you can create a “testamentary trust” in your last will and testament that is simpler, yet still effective if funded properly.
- Review your Life Insurance Requirements
- Many people don’t have much money when they are young, so life insurance becomes critical to ensuring your child has adequate funds available if you pass away at a young age.
- Update Account Ownership and Beneficiary Designations
- Properly titling accounts and naming the right beneficiaries to your investment accounts and life insurance policies is essential to finalizing your affairs.
See Daniel A. Timins, Estate Planning 101: 5 Lessons for New Parents, Kilpinger, August 6, 2018.