Estate Planning for New Parents: A Quick Summary
Having a child is a good reason to create or update an estate plan. The most important decision is naming a guardian—someone you trust to care for your child if both parents die or cannot care for them. Name both a first choice and a backup, and discuss the responsibility with them first.
You should also decide who would manage money for your child. This may be the same person as the guardian, but it does not have to be. A will can name a guardian and direct how assets should be handled. Many families also consider a revocable living trust to hold assets for children, appoint a trustee, and set rules for when and how funds may be used.
Update beneficiary designations on life insurance, retirement accounts, and financial accounts. These designations can control who receives the money, even if your will says something different. Avoid naming a young child directly without legal guidance, since a court process may be needed to manage the funds.
Finally, create durable powers of attorney and health-care documents so trusted people can handle financial and medical decisions if you are alive but unable to act. Review your plan after major changes, such as another child, a move, a divorce, or a change in the people you trust.
Essential Checklist
- Name a guardian and backup guardian for your children.
- Name someone to manage money left for them.
- Create or update your will—and consider a trust if appropriate.
- Review beneficiaries on life insurance and retirement accounts.
- Complete financial and health-care powers of attorney.
This is general information, not legal advice. An estate-planning attorney can tailor these documents to your family and state law.