Why New Parents Should Consider Creating an Estate Plan

Having a child can be one of the most momentous occasions in a person’s life, and while caring for a new child can be a joyous experience, it also comes with an enormous amount of responsibility. For instance, parents will need to begin contemplating how to provide for their child in the event of a tragedy.

Estate planning is one of the best ways to ensure that a family’s assets will be preserved for a child and that an appropriate guardian will take custody of the child. Although it’s not always pleasant to consider being separated from our loved ones, carefully providing for their futures can play a crucial role in ensuring their well-being. If your family was recently expanded, you should consider speaking with an experienced estate planning attorney who can help you begin the process of planning your own estate.

Estate Planning Basics

By creating an estate plan, parents can designate a person to act as their child’s guardian and can ensure that assets will be preserved for the child’s use. Estate plans can also be modified over time to account for changes, such as divorce or the birth or adoption of additional children. However, new parents should consider at least having the following documents in their initial estate plan:

  • A will, which will ensure that all of a testator’s assets are distributed according to their wishes. Parents can also name a guardian who will take custody of their children in the event of a testator’s death. Wills can also be used to create trusts, in which funds that are specifically set aside for a child’s needs can be placed. This step will also require the testator to designate a trustee who will manage the funds on behalf of the child in accordance with his or her instructions.
  • A Power of Attorney for Property, which allows testators to name an agent who will be authorized to act on their behalf if they become disabled. These documents will cover both financial and personal matters and can be as broadly drafted as the testator desires.
  • A Health Care Power of Attorney, which allows testators to designate someone else to make important health-related decisions on their behalf if they are disabled, whether temporarily or permanently. For families with children, these documents can also be used to designate a third party to make healthcare decisions on the child’s behalf.
  • Beneficiary Designations, which, when made on all retirement accounts and life insurance policies, will ensure that a parent’s assets go directly to the beneficiaries named in the document. The proceeds from these types of policies can replace lost income, while also covering household costs, living expenses, and debts owed by the decedent.

Those who fail to create an estate plan, risk leaving the distribution of their estate, as well as the decision of who will raise their children, up to a judge.

Call a Member of our Skokie Estate Planning Team

If you are a new parent and have questions about planning for your child’s future, feel free to call Orlowsky & Wilson, Ltd. Attorneys at Law at 847-325-5559 to schedule a confidential consultation with an experienced estate planning attorney today.

Updated as of July 2019
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