The birth of a baby is a busy and exciting time, but new parents must make time to create or update their wills to protect their child. If the unforeseen should happen, inclusion in a will can ensure the parents’ wishes for their children and their assets are followed.
Naming a Guardian in the Will
A will is a tool that parents have available to name guardians for their minor children. If there are no will and tragedy strikes where both parents die, the court is left in charge of deciding guardianship for the child(ren). And that decision may not be what the deceased parents would have wanted.
The selection of guardians is not always an easy one. Parents need to consider whether the individuals they choose are financially and emotionally capable of raising their child(ren). Preferably, parents would want to choose guardians that share the same values regarding morality, spirituality, and philosophy toward childrearing.
Naming an Executor of the Will
Creating a will requires that an executor be named. This is a person who will oversee the process of carrying out the will. Parents will want to carefully choose a responsible person that they trust to make sure the child receives what is provided for in the will and is treated according to their wishes.
Establishing a Trust
The will can be used to establish a testamentary trust that would provide funds to help provide for the child(ren)’s needs. An estate planning attorney can also help with creating a living trust that will allow assets to pass to the heirs without having to go through the probate court. A living trust can also reduce the amount of tax liability on the assets by balancing the estates of the parents if necessary.
Updating or Creating Other Important Documents
The birth of a child is a good time to create or update other important estate planning documents. New parents should review their named beneficiaries on life insurance policies, 401(k)s, and other investment or retirement accounts. Beneficiaries are typically named at the time these accounts are created, but life events like marriage and birth of children could trigger updating this information.
Setting up a durable power of attorney for both parents is also an important estate planning document to consider after the birth of a child. If one or both parents become incapacitated, a durable power of attorney allows an agent to act on their behalf when dealing with financial matters or official agencies for the child(ren).