Before you had your child, you only had to think about inheritance for your partner (and maybe your siblings or cousins). As self-sufficient adults, your heirs would be financially OK if you died tomorrow and left them whatever was in your estate. More importantly, they’d understand what to do with those assets and how to manage them.
Small children, on the other hand, cannot financially provide for themselves, and likely wouldn’t have the maturity or knowledge to handle the assets you left them. That’s why, when you have a child, your estate plans need to consider not only the money and property you’re leaving behind, but how your estate will be managed on your child’s behalf, and who will care for the child in your absence.
What’s the best way to provide for my child in my estate plans?
As a new parent, you’ll want to update your estate plans as soon as possible after your child’s birth or adoption. Here are a few key elements you should incorporate:
Legal guardianship designation
One of the most crucial considerations for parents of minor children is who would care for them if both of you were to die. It’s an unthinkable situation, but it could happen, so you’ll need to appoint a trusted, responsible legal guardian in your will. You may also wish to designate this person as a Standby Guardian, who can care for your child if you become permanently or temporarily incapacitated during your lifetime. Always ask a person before you include them as a guardian in your estate plans to ensure they accept and understand their responsibilities.
Revocable living trust and trustee
When you pass property through a will, it goes through a lengthy, expensive probate process. It also becomes tricky when you try to leave assets to a minor child, as they may not be capable of managing money and property yet. Instead, you can set up a trust, in which an appointed trustee manages your assets on behalf of a beneficiary (i.e., your child) until they are old enough to inherit it. A trust has the added benefit of keeping the inheritance process out of court, which means it is faster and more direct.
You can learn more about how a trust works to provide for your minor child or a beneficiary with special needs in our blog post.
If you have payable-on-death assets that require a special beneficiary designation form, such as a life insurance policy or a retirement account, update these to include your child as a new primary or secondary beneficiary.
Aside from the above, a complete estate plan also includes your will, a durable general power of attorney, and a durable medical power of attorney.
You may be tempted to put off estate plan updates because you’re too busy worrying about your child’s immediate needs, but it’s imperative to make time for this. The only thing more important than caring for your baby right now, is making sure they’ll be taken care of if something happens to you.
Speak with an estate planning attorney today.
Every family is different and has their own unique estate planning needs. The Law Office of Patricia E. Tichenor, P.L.L.C. has been assisting Northern Virginia families with wills, trusts, legal guardianships, and other estate-related documents for more than 15 years.
Contact us today to learn how we can help you create the best plan for your family, and ensure that your child’s future is secure.