What estate planning documents do new parents need to create?
New parents have much on their minds. Approaching the birth of your first child, your days may be full of researching and purchasing baby gear, setting up the nursery, and enjoying the last of your sleep-filled nights. Naturally, not all soon to be new parents will turn their thoughts to the important but often overlooked task of creating an estate plan. As a new parent, however, you will want to do everything in your power to protect your child’s future—and this requires making some critical estate planning decisions.
A Last Will and Testament is perhaps the most basic, but essential, estate planning document that a new parent can create. In your will, you will dictate who you want to receive what assets should you pass away. Most new parents will leave their share of assets to their spouse, to be used for the care of their child. Importantly, you can also nominate a guardian to care for your minor child if you and your spouse were to pass away unexpectedly. Without this vital guardian clause, the court may be forced to decide who will raise your minor child.
Selecting a guardian can be a difficult task. After all, no parent wants to consider the possibility that someone else might be forced to raise their minor child. You will want to consider the age of the potential guardian, their commitment to being a guardian, their belief system, resources, and much more. You should also name an alternative guardian in case your first choice guardian cannot fulfill the role.
A trust offers several crucial benefits to your child. Whereas assets passed down in a will must go through the time and expense of probate, assets held by a trust will avoid probate. Using a trust, you can set aside funds to provide for your child’s education and care, up until they reach an age at which they could receive the funds within the trust on their own. Trusts come with tax benefits and more flexibility than other types of estate planning tools. New parents should consult with an estate planning lawyer to find out more about what estate planning documents they should prepare now to protect their child’s future.