If You are a New Parent, You Need an Estate Plan
The birth of a child is an incredible, joyous moment in the lives of most parents. It is also an inflection point allowing you to take stock of your estate and plan properly to protect your spouse and your newborn child. Yes, you will likely be strapped for time worrying about purchasing the safest car seat, meeting with a pediatrician, and assessing your day care options, but estate planning is just as important and necessary.
Estate Plan Allows You to Select Someone You Trust to Raise Your Child if You are No Longer With Us
When you create a Last Will and Testament, you can name a guardian who will have the responsibility to take care of your children until they reach the age of adulthood. It is critically important to list a designated guardian in your estate plan. Without one, you are essentially leaving the decision up to a judge who does not know you, your family, or your friends.
Estate Plan Can Help Protect Your Family Financially
Many estate plans that have been carefully crafted with the assistance of an attorney in St. Charles feature some type of trust instrument. A trust is essentially an estate planning tool that can allow your children access to funds when they need them, but under the specific terms and conditions you have set forth. The guidelines you put in place for the management and disbursement of trust funds can help prevent your child from mismanaging and spending through all of the money you left for them.
The property in the trust is managed by a successor trustee, whom you choose, to ensure that the assets in the trust are used for the benefit of your children, just as you would have done. Without a trust in place for the benefit of your child, or children, your assets could be tied up in the probate process for months. In fact, depending on the complexity of your estate, the probate process could take over a year to complete.
Purchase Life insurance
If you have a newborn child, you need to get a life insurance policy. This will help provide a level of financial stability and support that your child and spouse will likely need to help cover specific short-time expenses and help with long-term expenses (e.g., college costs). Life insurance is especially valuable when you are a young family because, if something terrible happens and you are taken from us at an earlier-than-expected age, it can place a tremendous amount of financial stress on your loved ones.
Update Your Beneficiary Designations
If you have any of the following types of accounts, you need to take the time to update the beneficiary designations, as needed. These designations will dictate who receives the funds from these accounts. In fact, the designation listed on the account supersedes any directive you place in your Last Will and Testament or your trust. When you do trust planning, you must take care to name the beneficiaries correctly, or your plan will not work.
- 401(k) accounts and other employer-sponsored retirement plans and pensions
- Individual Retirement Accounts
- Checking accounts
- Savings accounts
- Life insurance policy
If you take these important steps, you will dramatically improve the long-term outlook on the financial security of your family. It may be unpleasant to think about what should be done after you are gone, but it is an absolute necessity and you will thank yourself down the road for being proactive and putting together an estate plan.
Polaris Law Group takes pride in offering an effective, full-service experience to our clients. If you want to ensure that you and your family are properly cared for, contact Polaris Law Group’s experienced trust and estate attorneys, Scott Stork and Raymond Chandler today. Scott and Raymond are seasoned estate planning attorneys and are members of the National Network of Estate Planning Attorneys, the National Academy of Elder Law Attorneys, and Elder Counsel. Schedule a meeting by phone or by filling out a quick contact form today.