Baby On The Way? Time To Get An Estate Plan!

As you prepare for your new arrival, do not neglect one of the most important tasks to prepare for parenthood: creating an estate plan.

A little planning now can make sure that, if the unthinkable were to happen, your tiny (or not so tiny) baby will be cared for.

Congratulations! Your family is growing and this is one of the most exciting times in your life! As you prepare for your new arrival, buying supplies, preparing a nursery, taking the classes, and reading all the books, do not neglect one of the most important tasks to prepare for parenthood: creating an estate plan. While tackling estate planning as you experience all the excitement of welcoming a new family member can feel like a real bummer, the reality is that, as a parent, your chief job is to make sure your little ones are protected.

A little planning now can make sure that, if the unthinkable were to happen, your tiny (or not so tiny) baby will be cared for. There are four key documents that any parent-to-be, or new parent, needs to have in place:

Revocable Trust

A revocable trust allows your assets to pass seamlessly to your child or children, outside of probate, in the way that you choose. Essentially, the trust becomes a “bucket” of assets. That bucket is to benefit your child or children, but the bucket is managed by someone else (perhaps a sibling or friend) until your children are old enough to manage those assets themselves. When you create a trust to benefit your children, you decide who will manage it for them and you decide how old they need to be before they manage it themselves. In other words, a revocable trust is how you ensure that, if you were gone, your children would have access to the funds they needed to live their lives, but that the access is routed through a trusted individual that you have chosen.

Last Will and Testament

Your Last Will and Testament is, most importantly, where you name guardians to care for your child or children if you are unable to care for them. Naming guardians can be a challenging task, but doing so is also one of the most important decisions you can make as a parent. While we certainly hope that the individual you name is never needed, having the documentation in place ensures that, if something did happen to you, your child would be raised by the person you chose, rather than by someone appointed by a court.

Financial Power of Attorney

A financial power of attorney names an individual or individuals who will have authority to manage your finances for you, during your lifetime, if you need that type of assistance.  For example, if you were in an accident and unable to pay bills and manage accounts, the individual you named as your agent could ensure that bills are paid and accounts are managed. Having a financial power of attorney in place ensures that your loved ones are able to access funds when necessary.

Medical Power of Attorney

Especially important for moms-to-be, a medical power of attorney identifies that individual that would have authority to make medical decisions on your behalf if you were unable to make those decisions for yourself. This could be critical during childbirth if you are under anesthesia—you want the individual of your choosing to be able to make decisions on your behalf if you are not able to do so.

During this exciting time as your family is growing, take a little time to ensure that your little one will be cared for, no matter the situation.