Welcoming a child into the world is an exciting and overwhelming time for new parents. While navigating parenthood, there’s a good chance that estate planning is the furthest thing from your mind. However, overlooking estate planning with a recent addition to the family could have devastating consequences for your loved ones down the road. If you are a new parent, here are a few essential estate planning tips to consider:
Create a will
A will is a document everyone should have for designating who will inherit their asset; however, if you’re a new parent, a will can go beyond end-of-life plans. Your will can also appoint a guardian for your child in the event that something happens to you and the other parent. For most parents, choosing a guardian is not a decision they want to leave up to the courts.
Update beneficiary accounts
A new addition to the family means that it’s probably time to review any accounts with beneficiary designations. If you neglect to keep these documents updated, you might unintentionally disinherit your child from a portion of your assets. Beneficiary designations override any instructions you have on your will – even if you explicitly leave everything to your child.
Consider a trust account
By placing your assets in a trust account before you pass on, you can reduce the amount of money your heirs will have to pay in taxes and allow them to skip the probate process altogether. You can also include specific instructions in your trust that dictate when and how your child will inherit your assets.
New parents mustn’t delay creating their end-of-life plans. Establishing an estate plan early will spare your family from a lengthy probate process and ensure that your heirs receive what you intend for them.