Just started a family or planning to have a child soon? While there are most likely a lot of things on your mind, one of the last things on the list (if it’s even there!) is probably estate planning. However, it is absolutely crucial to begin estate planning if you’re a new parent. Here are the top items to consider and reasons why estate planning is critical:
Nominate a guardian for your children.
Perhaps the most important of all, with minor children, you’ll want to to carefully consider who you would like to take care of your children should anything happen to you or your partner. If you won’t name a guardian, the courts will appoint one in your absence; while they will try their best at nominating the best one they see fit, their decisions may not align with yours.
There are a variety of factors to consider, as this person, ultimately, would be the one to raise your children. Would they be able to financially care for your child? Are they in good health? Are they supportive? Will your kids have to relocate? And, of course, you’ll need to have a conversation with that person if they would even want the role, as it is a huge responsibility.
Creating trust accounts for your children.
By determining how you want your assets allocated in your will, you may prevent your heir’s inheritance from being in a court-controlled locked account. Like a guardian, you can nominate a trustee, who will manage the funds, and ensure the money goes to things you believe are important, such as education, health, etc. You can also determine at what age your child will gain full control of the assets in the trust; you may want to allow them to have the lump sum at 30 rather than 18.
Set up a durable power of attorney for both financial and medical decisions.
Should you become incapacitated, a Durable Power of Attorney appoints a person of your choosing to make financial or medical decisions on your behalf. These can be two different people as these are separate realms of responsibility. If you have not set up a durable power of attorney, the court will appoint a guardian for you.
Estate planning may sound like a daunting task, but your loved ones and children will thank you for it. Hiring an experienced and knowledgeable attorney can put your mind at ease and help you finalize your documents.