Estate Planning for New Parents
Estate planning is not just for the rich and famous. Rather, it is something that all parents (and people, really) should consider. After all, it’s not about you anymore, but about your beautiful child and life, you will provide for your baby. Have you thought about guardianship for your child, in case something should happen to you? What would your child’s inheritance be, and who should handle it?
If you haven’t thought this through yet and it seems overwhelming, the checklist below will help you get a plan together for the newest member of the family.
Things to consider when planning your will:
1. Naming the executor of your estate: this person carries out your will, takes care of your tax obligations and represent you in any legal disputes among your beneficiaries.
2. Naming a legal guardian to your children: someone you trust who will be responsible for your children if they are under 18.
3. Having a Power of Attorney: if you become incapacitated, this trusted person will execute all your legal and financial matters.
4. Naming your beneficiaries of assets: who are your beneficiaries for your 401K, IRA and life insurance?
5. Setting up trust accounts: make sure you set it up in the name of your beneficiaries in your will. If you place your assets in a trust account, it may limit the amount of taxes your beneficiaries will have to pay.
6. Setting up a testamentary trust: When set up properly, a testamentary trust is created upon your death to catch assets for your underage beneficiaries. This protects assets against an immature judgment, and keeps your family out of the courthouse, eliminating the need to create time-consuming and expensive conservatorships with the court.
7. Making Funeral Arrangements: if you don’t outline your funeral arrangements, the state hands the responsibility to your legal next of kin.
Don’t try to do this all on your own; find an estate planning attorney to help you. An estate planning attorney will have a deep knowledge of probate, trust, and estate planning laws in your state. There are a lot of steps in this process that an attorney can help you weed through, and when done right, your loved ones will be saved from any courtroom drama or unnecessary tax bills.