Congratulations on your new baby! It’s a tiring but exciting phase of life to welcome a new child into your family. While you certainly have a lot on your plate now, make sure you don’t forget to take the time to update your estate plan. Many people think that estate planning is only for when you reached an advanced age. In reality, any major life event – such as the birth of a new baby – should trigger a revision of your estate plan, so that it stays current, accurate and thorough.
Changes you can make to your estate plan
The first thing you can do is to update your will to include your child by name as one of your beneficiaries. This is especially important when dealing with things such as life insurance policies, retirement accounts, bank accounts and the like. This can make the transfer easier, since the process of transferring ownership of accounts often is more complicated when these accounts don’t specifically designate beneficiaries.
Next, you should designate a guardian for your child. This is essential in order to make sure that someone you know and trust will be taking care of your child if both you and your spouse become incapacitated or pass away. It’s a good idea to name more than one backup guardian, in case your first choice is unable or unwilling to take on the responsibility.
If you want to, you can also set up a revocable trust to allow your assets to pass to your child or their guardian without the need for the probate process.
What might happen if you don’t
The unfortunate reality of this life is that unexpected accidents happen. You could be taken from your family at any moment. Especially now that you have a new little one to think of, it’s a good idea to take steps to make sure that they will receive the help they need when you are no longer with them.
If your child does not have a specific guardian named, they might face the prospect of lengthy court proceedings to determine who will take custody of them. If your will disposes of all of your assets without naming them, then their guardian might have to fight for your child’s rightful share of your estate.
As a parent, you would do anything for the well-being of your new child. Make sure that you take the time to update your estate plan, so that your child will be taken care of no matter what.