Having a baby is a major event in a parent’s life. While many new parents think about things like packing the diaper bag and making sure they have a safe car seat, there’s another important task they should take care of. New parents need to ensure they have an estate plan that will provide for their baby if both parents pass away.
There are several components of an estate plan that you should consider if you’re a new parent. Making sure you have all these in order gives you some control over what will happen with your child if you die.
Set the guardianship
One of the most important decisions you have to make is who is going to raise your child. The person you choose should have the ability to take care of your child and have similar values as you. Talking to them ahead of time is a good idea so you can discuss the points you feel are important.
Outline your final wishes
Outlining your final wishes for your medical care and financial matters can take the pressure off your loved ones if you become incapacitated. Set up a financial power of attorney and a healthcare power of attorney so there’s someone who can make those decisions for you if the time comes.
Plan for finances
Raising a child is expensive. Set up your estate plan to provide financial help for the guardian of your child. Consider using a trust with a separate trustee to provide checks and balances about what the money is used for.
Ensuring the estate plan fully meets your wishes is critical because the written documents are all that will be there to relay them when you pass away. Working with someone familiar with this type of situation is beneficial.