Becoming a parent can change virtually every element of your life, from how you spend your money and time to how you make plans for the future. If you already have an estate plan in place, you may need to make some fundamental changes to it once you have a son or daughter of your own. Conversely, if you do not yet have an estate plan in place when you become a parent, it is a good time to get down to business creating one.
Creating your estate plan gives you an opportunity to leave a lasting legacy behind for your child, and it can also give you peace of mind when it comes to who will provide care for your child, should you no longer be able to do so yourself. While every estate plan is different, there are some important steps you may want to take with regard to it once you become a first-time parent. For example, once you become a parent, consider the following:
Appointing a guardian for your child
While no parent wants to think about how a child would get by in their absence, it may prove wise to appoint a legal guardian for your child, should anything unexpected happen to you, or, if applicable, your partner.
Changing beneficiaries
Once you have a child of your own, you may have reason to want to change the beneficiaries you named in your retirement plans, life insurance policies and so on. You may, too, want to update the beneficiaries you named in your will after having a child, or, conversely, you may want to create a will and name your child a beneficiary if you do not already have one in place.
Creating a trust
While you can leave your child assets in a standard will, you may also want to consider establishing a trust. Placing assets in a trust allows your loved ones to skip the probate process, saving time and money, and it can also reduce the amount of taxes your loved ones must pay on your estate.
While these are some of the key elements new parents may want to consider when drafting an estate plan, please note that this is not an exhaustive list of all recommended steps.
