Estate planning for new parents: What do you need to know?

On Behalf of | Mar 24, 2020 | Estate Planning |

The last thing any new parent wants to think about is what would become of their child if something were to happen to both parents. However, the reality is that life is full of the unexpected, much of which is unfortunate. The best thing you, as a new parent, can do is make preparations for your child, just in case. Kiplinger details a few estate planning lessons for new parents that you should follow. 

Pick a Guardian and Trustee 

If something were to happen to you, your child will still need someone to care for him or her and provide for him or her financially. This is why it is essential that you name a guardian and a trustee. 

The guardian will assume all the typical parenting responsibilities, such as ensuring your child brushes his or her teeth, goes to school, eats a balanced diet and tries new things. When picking a guardian, ask yourself what is in the best interest of your child. Do not base your decision on which of your siblings you like best. 

The trustee will assume all financial responsibilities for your child until he or she turns 18. Financial responsibilities include paying the bills, filing taxes, investing money and distributing your remaining funds to your child in accordance with your will or estate plan. 

Create “Living Documents”  

Sometimes, a loss is mental and not physical. Living documents, such as a power of attorney and health care proxy, can ensure that you have a voice even if you become incapacitated. A power of attorney has the right to access your funds for your child’s needs, while a health care proxy has the power to make medical decisions on your behalf should you become unable to. 

Establish End-of-Life Documents 

Next, focus on establishing a will and separate trust document. Not only can you use these documents to do the obvious — which is to detail how you would like your estate to be distributed — but also, you can use them to express your views and desires for your offspring. Do you want your child to have unusual experiences or access to exotic vacations? Do you want your child to attend alternative schooling? Would you like to set aside funds for a future business endeavor of your child’s? You can address all these extras and then some in your will and trust.