3 Reasons New Parents Need an Estate Plan
Having a baby is such an exciting time. There’s so much to think about. Baby-proofing the house, choosing your baby’s health care provider, getting health insurance for your baby, and buying a car seat are just a few of the things on your mind. One important item that might not be on your list but should be is that new parents need an estate plan.
The day your child is born, you realize that protecting them is a priority. The problem is that life is unpredictable. You know how you want to raise your child, but what if something happens and you’re not able to always be there for your child? It’s not something anyone wants to think about, but wouldn’t it be best to put a plan in place just in case? Estate planning is about protecting the people you love and doing the best you can to make sure they will be taken care of, no matter what happens.
Here are three reasons new parents need an estate plan:
1. Ensure your child will always be taken care of. If something happens to you and your spouse/partner, who will raise your child? In a will, you can select a guardian for your child. If you don’t do that, the state will do it for you and the choice could be someone who you would never want to raise your child. Appointing a guardian for your child is one of the most important tasks you’ll ever do. You know what’s best for them. In order to make a good decision, there are a lot of things to consider.
2. Make sure your child will be financially safe. In an estate plan you can determine how you want your assets distributed if you pass away. Without an estate plan, your assets will be distributed based on the Massachusetts law of intestacy. That means your assets may not go to the people you want.
By doing your estate plan, you can name your child as a beneficiary by using a will or a trust. You can choose someone responsible to manage the distribution process, either an executor for a will or a trustee for a trust. Both a will and a trust let you decide who gets what when you die.
With a will, if your child is under 18 years of age, you’ll name a person to act as guardian of the property you leave to your child. When your child turns 18, they will inherit whatever you left them. This may not be what you want to happen since many 18-year-olds aren’t financially responsible and may not spend their inheritance wisely.
Another option is for the money and assets to be put in a trust for the benefit of your minor child. You name the person who will manage the trust (trustee). This option gives you more control over how much and when your child receives portions of the assets. For example, you could decide that once your child is a young adult, you want to give a certain percentage of assets to them at specific ages or when they meet certain milestones in life (e.g., attending college).
3. Choose someone you trust to act for you in case of accident or illness. If you become unable to make financial decisions, even for a short period of time, who would pay the bills? By creating a power of attorney, you’ll name someone who can act on your behalf in regard to your financial, business, or legal matters. So, if you become incapacitated your rent or mortgage could still be paid and other regular expenses for caring for your child could also be paid.
In a health care proxy, you choose a person to make medical decisions for you if you ever become incapacitated and unable to make those choices for yourself. This gives you peace of mind that you’ll receive necessary care and prevents potential conflict among family members that could be stressful to your child.
We can help create these estate planning documents for you, so you can do your best to protect your child. As a Massachusetts estate planning attorney and a child guardianship lawyer, I can work with you to put the best estate plan in place, so you’ll have peace of mind that your child will be taken care of. Contact us today for a free, no-obligation consultation.
