Having a new baby is a joyful event in a parent’s life. While almost everything about this is a pleasure for parents, there is one thing that parents need to consider now — estate planning.
Your estate plan is more than a basic outline of who is going to get what if you end up passing away. For young parents, this plan includes provisions for your children. Here are some critical points for young parents:
Who’s going to make decisions for you?
Your estate plan actually starts before you pass away. You have to decide who is going to make decisions for you if you are unable to make them for yourself. This includes someone to make your health care decisions and someone who will make financial decisions. You want to ensure your medical care is what you want and need. As far as finances go, you don’t want to have them wrecked because you can’t make those decisions. You must choose someone responsible to handle these duties.
How will my children be financially supported?
If something happens to you and their other parent, your children will be left without the financial support that you provide. Having a life insurance policy might help to cover the expenses your children will have while they are growing up. Because there are different types of life insurance policies, you need to ensure that you choose the one that will meet your children’s needs and your goals for them.
Another thing to consider is setting up a trust for your children. This puts you in control of when and how your children receive these assets. Without this, there is a good chance that the court will be the entity to decide how the assets are handled until the child is either 18 or 21 years old.
Who will care for my children?
One of the most important things that you have to decide is whom you want to care for your children if you pass away. This person needs to be named guardian over the children in your estate plan. The guardian should be willing and able to care for your children. They must be financially stable and physically able to care for them.
Even though there aren’t very many pleasant thoughts that come along with having to make these decisions, you can rest a bit easier knowing that you’ve done all you can to plan for your children. Ultimately, you will hope you live to see them grow up, but planning for the unthinkable can help them tremendously.