New Baby? Time to Create Your Estate Plan
November 3, 2017
By Cory Howes
Estate planning is often the one item that gets pushed back on nearly everyone’s to-do list. The reasons people delay vary: lack of time, not thinking you have enough assets, not knowing how to start, or fear of contemplating death. Whatever the reason for not putting an estate plan together, it is important to understand that if you just had a baby, now is the time to meet with an estate planning attorney to implement a plan.
In general terms, an estate plan is a set of legal documents that outline your wishes on how your assets should be distributed and who is responsible for your dependents, in the event of your death or legal incapacity. An estate plan should be developed with a qualified estate planning attorney to ensure that it will work as intended and fully protect your family. Here’s how an estate plan can help you protect the newest addition to your family.
Protect Your Children
Perhaps the top reason to put together an estate plan is to dictate who will care for your children in the event you and your spouse die early or become legally incapacitated and therefore unable to care for your kids. Your estate plan can designate someone you trust and who shares your values as a guardian of your minor children. This is the person who will essentially be a surrogate parent and raise your children to adulthood. When selecting a guardian, it is important to choose people who will be willing participants in your estate plan, who share your values and parenting philosophy, and whom you trust to raise your children.
Distribute Your Assets and Belongings
While some assets have purely financial value, others have deep emotional attachments. Not only will a trust-based estate plan speed up and perhaps eliminate the probate process, it will save your heirs bickering, time, and money. As you may already know, probate is the court-supervised process of wrapping up a deceased person’s affairs. Probate consists of multiple steps, including presenting a deceased’s last will and testament if they had one (otherwise, the probate court uses the government’s default plan known as intestacy), gathering assets, paying off debts, and distributing what’s left over to the deceased’s heirs.
Using a trust to provide specific instructions on distribution of assets can help ward off conflict among surviving relatives. Additionally, special features in your trust, sometimes called lifetime trusts, also allow you provide long-term financial stability and support for your children. These lifetime trusts can prevent a financially immature young child from using up their inheritance.
Provide for Your Loved Ones
Beyond your children, creating an estate plan will inform your loved ones what final health care decisions should be made on your behalf in the event you become incapacitated and are unable to make decisions. Serving as healthcare proxy is an enormous responsibility for the person you name, but you can help lessen the burden by communicating your wishes about medical decisions. One significant advantage of properly planning is that your intentions can be clearly stated so that your surviving family members do not have to guess what your desires are.
If you have experienced a recent life-event—such as a new baby, a work promotion, purchasing a home, moving to a new state, or any other milestone—you should discuss your situation with an estate planning attorney. If you already have a will or trust in place, it may make sense to update it to ensure it provides for your family and loved ones. To learn how estate planning can protect you, your newborn, and the rest of your family, contact us today.