When adding a new child to your family, his or her immediate needs can seem overwhelming. This is true whether you give birth or adopt your child.
Nevertheless, you should try to think about updating your estate plan if you already have one or creating one if you do not. This provides security for your child’s future even if you are not able to be a part of it.
1. Choose a guardian
The first thing you should consider when estate planning as a new parent is who will take care of your children if both you and the other parent die. Setting aside money is important, but less so than knowing where your child will live and who will be responsible for meeting his or her basic needs. Before you write a will naming a guardian for your children, make sure you discuss it with the person you have chosen and ask his or her permission. Becoming a guardian is a big responsibility, and the person you choose may not feel up to it.
2. Update beneficiary designations
While you have a responsibility to provide for your child in the event of your death, remember that minors lack the legal status to control property. According to Kiplinger, you have to either create a trust naming the child as a beneficiary or appoint someone who can control assets on your child’s behalf until he or she comes of age. This person can be the same as your child’s guardian but does not have to be.
3. Establish your own “living documents”
Living documents are things like advance directives that describe what kind of medical treatments you want to receive if you can no longer make health care decisions on your own. If you were to become incapacitated when your children were still minors, they would not be able to make these decisions on your behalf. Even if your children were in their late teens or early 20s, they may not have the maturity to handle the responsibility and emotional strain of making health care decisions for a parent.
Your responsibility to provide for your child does not end with your death or incapacitation. Because you never know what could happen, or when, you should make provisions for the future as soon as possible.