Having a new baby is a joy for most parents. During the pregnancy, they need to do a lot of planning. You probably think about things like the nursery and diapers, but many don’t think about the estate plan they need to create so their child is cared for if something happens to both parents.
There are several things that new parents need to consider when they’re setting up their estate plan. One of these is what’s going to happen in their final days if they become incapacitated. These include setting up advanced directives and powers of attorney designations. Together, these form the basis for medical and financial decisions to be made on their behalf.
Parents also need to name a guardian for the child. This person will raise the child for them in the event of their untimely demise. It’s a good idea to talk to the person prior to naming them in the documents to learn if they share similar parenting values and if they will be up for the task.
Setting up a financial backing for the child is another priority. You need to think about what assets you have that will be able to help support the child. You might consider trusts, but don’t forget to look at financial accounts that use payable-on-death designations.
Once you make your estate plan, you have to remember to reevaluate it periodically to ensure that everything is still set how you intend. This is also a good time to check beneficiary designations to ensure that the appropriate people are still named.
