One of life’s greatest joys is welcoming a new child into the world. As a new parent, you may already be making plans for your child’s future. One future possibility you may not have considered is the chance that both you and your child’s other parent could die before your child is grown. While this is a difficult topic to think about, in order to best help your child should the unthinkable occur you will want to have an estate plan in place.
Designate a guardian in your will
Designating a guardian in your will is an essential component of a new parent’s estate plan. The guardian is the person who will step into your shoes as a parental figure to make the personal and financial decisions you would make as a parent on behalf of your child if both you and your child’s other parent pass away before the child turns age 18.
Note that even if you name a guardian in your will, that guardian must be approved by the court. The court will base this decision on the child’s best interests.
Pass on your assets in a will
The cornerstone of most estate plans is the basic will. In a will, you can pass on your assets to your child should you and your child’s other parent pass away. It is important to remember that if you leave an inheritance to a minor child your child’s guardian will manage these funds until the child reaches age 18.
Consider life insurance
Finally, you may also want to consider taking out a life insurance policy and naming your child as your beneficiary. This way your child will be provided for financially if you and your child’s other parent pass away. Like an inheritance, these funds will be managed by your child’s guardian if your child receives the proceeds of a life insurance policy before they reach age 18.
Estate planning is an important step you can take as a new parent that will benefit your child should the unexpected occur. We cannot predict the future, so it is best to be prepared for all possibilities.