New parents have a lot on their minds already, so the last thing they might want to think about is estate planning. However, estate planning becomes even more important when people become parents. Estate planning ensures that your children are taken care of in the event that anything unexpected happens to you.
What steps should you take first?
The first thing that you should look at is your assets. Figuring out how much you have in savings, retirement accounts, or real estate and other assets that could be left behind for your child can be an essential part of estate planning.
After you’ve accounted for all of your current belongings, you want to look into providing your children with additional money after you die. Many workplaces offer life insurance plans, but you might consider purchasing an additional life insurance plan depending on your situation.
Naming a guardian for your children
At least until your children are over the age of 18, you will want to name a guardian for your child. This eliminates confusion among surviving family members as to who takes care of your child after you’re gone. Naming a guardian will also give you peace of mind as to how your child will be raised and taken care of. You can pick a person who shares your values as well as loves your child as much as you do.
Update your beneficiaries
If you have an existing estate plan, you’ll want to update your beneficiaries to include your children. If you don’t, your children could be left out of any payouts after your death.
Most life insurance plans will ask you to name beneficiaries too, so it’s important to keep track of all those plans and update them accordingly. You can also update instructions with your bank or the third party in charge of your trust or estate plans. Once you have a trust in place, you will be able to name your trust as a beneficiary knowing that your trust has clear and specific instructions in place to manage the money for your children.
Be prepared to regularly update the plan
In order to account for changes in relationships as well as changes in finances and other life situations, your estate plan should be regularly reviewed and updated as your life progresses.
