Around 64% of adults in this country don’t have a will. While this is a bad situation for many people, it is a tragedy for new parents. Not having an estate plan means that your assets will be passed along to beneficiaries based on the state’s intestate laws. But, if you have minor children, it could mean that your children are sent into the foster care system.
Creating an estate plan now gives you the chance to set the plan in place for your child. You can name a guardian for your child in the estate plan. This is the person who will raise the child as their own if you and the child’s other parent both pass away.
When you decide on the guardian, you should sit down with them and discuss your wishes. This is a chance for you to ensure that they’re up for taking on this responsibility and gives them a chance to ask you questions. You can also discuss any other provisions you’ve made for them.
Other aspects of your estate plan can help to provide the financial backing the guardian will need to raise the children. You can use your will to pass along some assets, while others might be better off funneled into trusts. You also need to think about the beneficiary designation on your life insurance policy, as well as the payable on death designation on financial accounts.
Once you’ve set your estate plan up, don’t just forget about it. You should review it periodically to ensure that it still meets your child’s needs and reflects your wishes the kids and your assets.