Once you have a child, most of your decisions will center on what’s best for the baby. You must ensure that you’re making decisions in their best interests. One thing that some parents forget about is planning for the future. As a new parent, you must get an estate plan established so that your child has the benefits it provides if something happens to you.
There are a few things that you have to think about when you’re getting this together. It surprises some parents that an estate plan is not only intended for use after they pass away. The estate plan will also cover what needs to happen if they become incapacitated.
Power of attorney and living will
Your power of attorney designations, as well as the living will, outline plans for should you become incapacitated. The power of attorney enables someone to make decisions for you. Setting one up for your financial matters and one for your medical care is important. The living will is the document that tells your medical care team what your wishes are for treatments and similar facets of care.
Planning for the children
Your plan for your children is one of the most important things that you can do for them. As part of the estate plan, you should set up the guardianship designation. The person you name as guardian must be able to raise the children on your behalf. Ideally, you will choose a person who has similar beliefs so that you know they are being raised in the same manner as you’d raise them.
You also need to try to plan for the expense of raising the children. This can be costly, so think about setting up trusts to help provide for them. You may also be able to use a will. Name someone as the payable on death designee for your financial accounts who will use the funds in them to support the children. Your life insurance can also help to cover the expenses related to the children after the money for your funeral and burial are taken out.
While making the initial estate plan is a step in the right direction, you can’t forget to review it periodically. Your child’s needs may change as they grow and other circumstances might require you to change various aspects of the plan. Taking the time to do this can help to ensure that they have what they need if you pass away.
