When you find out that you are expecting a baby, you have a lot of things that you need to take care of. One task might be something you haven’t thought of – your estate plan. This is what can help to ensure that your child is taken care of if something happens to you.
The bare bones of the estate plan are still necessary. This includes your will and any trusts you choose to establish so that your assets can be handed down to the heirs you choose. You can use these to care for your children, so make sure that you have them set up in a way that does this.
Who is going to raise your children?
If something does happen to you, the guardian you name will be responsible for raising your children. Think carefully about how you want your children raised and choose a guardian who will uphold those values. This person will make medical, educational and other decisions for your children. They are essentially taking on your role. Remember, the court does have the power to override your guardianship designation if it feels like it isn’t in the best interests of the children.
Who will make financial decisions?
On top of the person who is named the guardian, you need to name a trustee to handle the financial decisions related to the children. It is possible to name the guardian as the trustee, but some people prefer to name someone else to provide a system of checks and balances over the estate that your children have after you pass away. When you name a trustee, you must pick someone who is financially responsible and who is willing to serve until your children become financially responsible, even if this occurs after they become adults.
Do you need only one person for each position?
You should name alternatives for both the guardian and the trustee. This ensures that if something happens to your primary choice, there is someone else that you chose to step in to fill the duties. It is best to talk to the primary and the alternatives, so they all understand your plans. This gives you a chance to ensure that they know what ideas you have about raising the kids.
As your children grow up, you may realize that some points of your estate plan need to be changed. Periodically reviewing it can ensure that it is still up to date.
