According to Experian, 76% of American adults believe that estate planning is important. However, many of those same people do not have a will.
Whether you have started already started estate planning or not, the birth of a child has significant implications for your plans. Make sure you provide for your child’s future in the event of your death.
Appoint a guardian
If something happens to both parents, you want to have a say in who will raise your minor child on your behalf. You will need to create or update your will to reflect your choice of guardian. You may want to designate backup choices if your first option is unable to fill the role. If you do not appoint a guardian in your will, the courts will determine who will care for your child, which may result in an outcome you would not agree with.
Consider setting up a trust
You cannot name minors as beneficiaries of life insurance policies or retirement accounts, and your child will have to wait until he or she is an adult to receive any inheritance provided in your will. You may want to consider setting up a trust if you want to ensure your child has access to funds before turning 18. You can name the trust as the beneficiary of your important policies and accounts.
Estate planning is not a one-size-fits-all process, particularly for families with uncommon circumstances. You will need to consider your child’s unique needs when making decisions regarding your estate.