Welcoming a child into your family may have been something for which you waited for a long time. Some people dream of being parents for most of their lives and cannot wait until the day comes that they can hold their bundle of joy. Of course, before the baby's arrival and even after, you will need to make a number of preparations.
You may feel like you have considered everything from the perfect car seat to where you hope your child goes to college. However, you may not have given a less pleasant topic its due consideration. After welcoming your new addition, it is wise to create an estate plan to ensure the protection of your child should the worst happen.
What should go into your plan?
When you think of estate planning, the first things that pop into your head may be elderly people or individuals with a great deal of money. However, anyone can benefit from having an estate plan, especially new parents. Some aspects you may want to make sure your plan has may include the following:
- A will: While most estate plans do have a will, this document is especially important for new parents because it is in this document that you can name the person you want to act as your child's guardian in the event that neither you nor the other parent can care for him or her.
- Life insurance: Having a life insurance policy can provide some financial protection for your child and his or her guardian in the event of your passing. Reviewing various policies could give you the opportunity to find the one that best suits your needs.
- A trust: While a trust is not an essential estate planning tool, it may still be wise to create one. Because your child cannot directly inherit assets while a minor, setting up a trust could ensure that a trusted person manages the assets until your child reaches adulthood.
- Beneficiary designations: Many of your financial accounts likely have the option to designate a beneficiary to receive the funds after your passing. Updating your designations after your child is born is important.
While the idea of not being there for your child may be one that you hope to put off, it is better to address such possibilities sooner rather than later. If you have questions about estate planning as a new parent, you may want to contact a New Jersey attorney.