Having a child is a huge milestone for you and your spouse. It is exciting and intimidating all at once. Parenting brings many new opportunities, challenges and responsibilities in various factors of your life. As you embark on this new adventure, it is important not to neglect the importance of estate planning.
Even if you already have an estate plan, the birth of your child warrants a review and an update. You may also need to bring new documents into the fold. Here are some estate planning essentials to consider as a new parent.
If you do not have a will yet, now is the time to do so. Not only is this crucial for deciding what happens to your assets when you die but also who takes care of your children. Even if you have a will in place, you should designate a legal guardian for your child. A guardian is someone who will be responsible for raising your child if you die before the child becomes 18 years old. Your will is the only way you can make this decision, so it is vital to create one even if you do not have many assets to pass down yet.
Powers of attorney
Medical and financial powers of attorney exist to give you and your family peace of mind if you suffer a sudden illness or accident and become unable to vocalize or make your own choices. You can utilize estate planning documents to lay out your wishes and empower those you appoint to make decisions regarding your money and health care.
This may technically fall under financial planning, but it is an important factor to consider when thinking about all of this. Purchasing a life insurance policy is helpful for ensuring your child has access to financial support if you and/or the other parent dies unexpectedly. Term life insurance may be a good choice for young parents.