New Parents and Estate Planning
When you have a child, you are responsible for caring for that child and ensuring their needs are met until they are 18 or older. While you are likely focusing on the day-to-day with your new child, you should always stop and consider long-term plans, including what might happen if you become incapacitated or you pass away. You do not want to leave a child without parents or the resources they need, so it is important to create an estate plan with the help of an experienced attorney. If you already have an estate plan, you should update it to reflect your new child.
You should discuss your specific needs with a Sarasota estate planning attorney, though the following are some steps you might want to take if you are a new parent.
Draft a Will
You might think of a last will and testament as a document that designates which beneficiaries will receive your property. However, wills also have another highly important purpose for parents - naming a guardian for your child should something happen to both parents. If you do not designate a guardian, the state can take custody of your child until the court settles on an appropriate guardian. It is, therefore, critical to address this matter in your will.
Create a Trust
If you pass away while your child is still a minor, they will not be able to receive their inheritance from your will, since they cannot manage the funds themselves. The court might have to name someone to manage the money, which presents the risk of mismanagement. Instead, consider creating a trust that allows you to name a successor trustee who can manage the funds, use them to benefit your child, and then distribute the funds per your instructions when they are old enough.
Update Beneficiary Accounts
Not all assets and property are distributed through a will or trust, as many financial accounts allow you to name a direct beneficiary. Such accounts include:
- Life insurance policies
- IRAs and 401(k)s
- Bank accounts
- Investment accounts
You can set your spouse as the primary beneficiary, but also name your child as a secondary beneficiary. This helps to ensure your children will inherit a portion of these funds.
Purchase Life Insurance
This might seem like a simple step, yet it is highly important. If something happens to you, your spouse will lose your income, and life insurance benefits can help them cover the costs of raising your child. If something happens to both parents, the life insurance funds can help your child’s new guardian with the financial burden of taking care of a new child in the household.
Consult with Our Sarasota Estate Planning Lawyers about Your Options
There are many reasons why new parents should consult with a Sarasota estate planning attorney, and you should not wait to schedule an appointment with Inverso Law Group. Call 941-926-6039 or contact us online to discuss your options for a comprehensive estate plan that will protect your child.