Most people don’t think they need to start estate planning at a younger age. But estate planning is beneficial no matter how old you are. Especially when you’re a new parent, taking the time to start estate planning can secure your child’s future and bring you peace of mind.
Here are three tips to consider when estate planning as a new parent.
1. Name a guardian for your child
Naming a guardian in your will is a way to ensure that someone will be there to take care of your child if something happens to you. Ask a friend or family member if they are comfortable taking on the responsibility of raising your child. You might also want to make sure this person has the physical, emotional and financial capacity to care for your child.
2. Set up a trust
A trust allows you to set aside assets like money or property for your child. If something happens to you while your child is still young, the trust will remain under the care of an appointed trustee. This prevents your child from inheriting a large sum of money or other assets before they turn 18.
3. Continue to update your will
When life changes, so should your will. As your family grows and evolves, you’ll want to update your will so that each beneficiary you intend to leave an inheritance for is covered.
Nearly 72% of Americans don’t have an up-to-date will. This can cause problems later down the line, especially if your old will doesn’t include new additions to the family. In general, you should review your will every three to five years, or update it if and when you decide to have more children.
When you’re a new parent, the last thing that’s on your mind is estate planning. It can seem like just another task that will add stress and chaos to your already busy life. While it may not be a priority, estate planning as a new parent can benefit your family and bring security and peace to your life.