The birth of your child means that your world has completely changed. Now, instead of you and your spouse forging ahead on your own with only the needs of you two to consider, you now must think about the life of your baby. This idea may bring great joy as you think of the ways your child will grow, but you may also have to face the possibility that you may not be there to witness that growth.
It is an unfortunate reality that accidents happen that leave children without parents. While this may seem like a dismal thought to have so soon after the happy occasion of your child's birth, accidents can happen at any time. As a result, you may want to begin estate planning as soon as possible.
Why estate plan?
You may not see the immediate need of estate planning because you and your spouse do not have a considerable amount of money. However, these plans go far beyond simply stating where your assets should go after death. In particular, as a parent, you will want to make sure that your child will receive the proper care. With your will, you can name a person to act as your child's guardian in the event that you and your spouse can no longer do so.
You may also want to consider other planning tools like the following:
- Creating a power of attorney: This step can appoint someone to handle medical or financial decisions in the event of incapacitation.
- Creating trust accounts: If your child is a minor at the time of your death, he or she cannot directly inherit property. However, you can set up a trust account that can protect the assets until your child reaches adulthood.
- Making funeral arrangements: You may not want to think about your demise so closely, but having these plans in place may prevent your child or other close loved one from having the responsibility of making such choices during an already emotional time.
- Naming an executor: You can also name the person you wish to act as executor of your estate. This person will handle the necessary tasks associated with settling your final affairs.
Your estate plan can include as much or as little information as you desire, but you may want to remember that a more comprehensive plan could put less stress on your child and other surviving family in the event of your passing.