Very few events in life are as exciting as having a new baby. The extra love and happiness can be overwhelming, but so can all the new tasks that come along with adding to your family. While arranging your life and schedule to revolve around your child, estate planning is probably the farthest thing from your mind. However, new babies definitely mean it is time for you to make a new estate plan.
You will need to name a guardian for your minor children in the event of your death. When selecting a guardian, think about who is likely to raise your child in the same way you would. Choose a guardian who shares your values, morals, and lifestyle. You should also keep in mind that if you were to pass away but the other parent does not, then custody of the child will automatically pass to that parent, unless that parent is somehow unfit. This is relevant in those cases where the parents are divorced or separated. You will not be able to name a guardian to “take over” your parenting time or your custody responsibilities if the other parent is still living and is a fit parent.
You will also want to consider creating a trust to help provide for the financial stability for your child, especially if you were to pass away before your child is an adult. With a trust, you can transfer assets to the trust, and you can dictate how those assets are to be administered and used. For example, you can state that the trust is to be used to help with the child’s college education, regular living expenses buying his or her first house, or carrying on the family business. You will name a trustee, who will be responsible for overseeing the trust and administering it in accordance with your wishes. The trustee that you name does not have to be the same person you name as guardian for your child, which is helpful when the guardian may not be financially responsible.
You also need to update the beneficiaries you already have named on certain accounts and investments. You may have life insurance, 401(k)s, savings accounts, or an IRA. You need to update the beneficiary named on these documents when you have a new child to make sure that he or she receives the asset in a trust, and not directly, with a minimum of trouble when you pass on. If you fail to name a beneficiary, then the assets will have to pass through probate before being distributed, which can be expenses and time consuming.
Our Los Angeles California attorneys have extensive experience helping young families with babies with their estate plans and taking their families’ changing needs into account. Call us today for a consultation.
