Having a child is a life-altering experience. It changes the way you view and interact with the world.
One important change for new parents is their estate plan. You now have to plan for a new person’s future, which introduces many new considerations.
Assigning a guardian
If you pass on before your children reach the age of majority, you need to know that you leave them in the hands of a trusted individual. If you do not assign a guardian and both you and the other parent are no longer capable of caring for your children, any family member or random interested party has the right to petition for custody. If nobody steps up, the court may place your offspring into the turmoil of the foster system. You also have the right to specifically forbid any individual you find untrustworthy from ever becoming your children’s guardian.
Safeguarding your children’s inheritance
Minors may not legally inherit assets worth over a certain amount until they turn 18. A simple trust can help protect your children’s inheritance until they become old enough to access it themselves. It is important to pick a trustworthy executor to handle it in the interim. A simple trust also allows you to avoid dumping the responsibility of a large lump sum of money on your children at an age when they may not be ready to handle it.
Updating your estate plan allows you to prepare for a future where you may not be able to personally see to your children’s welfare. By making plans now, you help set them up for success even when you are not physically there.