Why should new parents set up an estate plan?

On Behalf of | Jul 22, 2019 | Estate Planning | 0 comments

New parents have plenty of things to worry about. You are trying to adjust to a new sleep schedule (or lack thereof), setting up a new routine and getting to know your new favorite person. Even if you have started thinking your baby’s college fund, you probably have not considered what will happen to your child if you and your spouse are no longer around. That just seems a long way off.

While you likely have a lot of time with your child, creating an estate plan protects your children, no matter what happens. Nobody likes to think about passing on, but with an estate plan in place, you at least know your children will have nothing to worry about. Here are some reasons new parents should consider setting up estate documents.

Name a legal guardian

If something happens to you and your partner, minor children will need someone to look after them. The court will name a legal guardian if you do not pick one of your own. Naming a guardian gives you the opportunity to pick a person you trust with a similar parenting style. You want to pick someone who can handle the responsibility of raising your children. The court will likely appoint your closest next of kin, which may or may not be who you would choose to look after your children.

Set up an advance directive for health care

Something could happen to you and your spouse that leaves you incapacitated and unable to make decisions regarding your health care. Young children will be unable to make such decisions. An advance directive allows you to appoint someone to make medical decisions on your behalf. You can also include instructions about what life-saving measures you do and do not want in your advance directive.

Pick a durable power of attorney

If you become incapacitated, you will also need someone to handle your finances. According to Nerd Wallet, a durable power of attorney allows you to name someone who can pay your bills, move money around and handle all your financial responsibilities. Having this document ensures your children will have someone managing your household, in case the worst happens.

Create a will or trust accounts

A will or trust documents allow you to pass on money and other assets to beneficiaries. Without either of these documents, your estate will pass through the probate court, and the court will divide it how it sees fit. By creating estate planning documents, you control how your assets are dispersed and who receives what. With minor children, you may wish to set up a trust to have money distributed once your children reach certain ages. You can also stipulate your children receive funds when they attend college or get married. Or you may wish to pass on your assets through a will. Drawing up these documents now protects your children’s financial futures.

Make funeral arrangements

Planning your funeral may sound particularly morbid. However, if you do not make these arrangements, the duty typically falls to your next of kin. Your family will be dealing with enough, and they will not need this on their plates too. If you lay out funeral plans now, your wishes will be respected, and your family will not have to make difficult decisions.

Most people do not want to think about passing on. However, when you have children, it is important to have plans in place to protect them, no matter what happens.