First comes love, then comes marriage, then comes a baby… and a trip to your attorney’s office?
I had the pleasure of helping throw a baby shower for my best friend this weekend, and attended another. I must be of a certain age, because it seems like everyone around me is welcoming a little one into the family!
With the many things to do and learn during those nine months (and the aftermath), updating your estate plan is probably not on the list. However, it should be, and here’s why:
1. You need to choose who would take care of your child(ren) if something happened to both you and your spouse or partner. Who would raise them and who would handle the assets you left them? Few of us at this age like to contemplate this scenario, but it could happen and your children could be at risk. So, speak openly to each other and select who you would choose to raise your child(ren). This can prevent family battles (how well do your in-laws get along with your family? do you think they could easily agree on who should raise your children?) and allow you to select who you both think is best.
2. You might be surprised to learn what happens if you do not have a will: If you have a spouse and a child, and die without a will, your spouse and child would split your probate estate (your probate estate being those assets that are not joint with right of survivorship and do not have beneficiaries named). Would you want your three-year old to inherit one-half of these assets? If not, have a will prepared to avoid this scenario.
3. You can control access to your child’s inheritance until a certain age: Do you want your child(ren) to have access to an inheritance at age 18? If not, you can set up a trust to hold those assets and to be managed by a Trustee for a child’s benefit until some later time, or indefinitely. Have a special needs child? Additional planning will be necessary.
4. You might need life insurance: Would your spouse be able to cover the household expenses without the benefit of your income, or vice versa? It may be time to take a look at buying some life insurance, too.
5. You can make it easier on your loved ones: How are your assets titled? How easy or difficult would it be for your spouse or partner to access or transfer your financial accounts in the case of your incapacity or death? An estate planner can make recommendations in these regards.
6. You can make health care decisions: What guidance do you want to give your spouse or partner in terms of making medical decisions if you are unable? You should have an Advance Directive for Healthcare, and should communicate openly about any wishes you might have.
These are only a few of the reasons that young families need to take their estate plan seriously. You can truly protect your loved ones by properly addressing these issues.
CAVEAT: This web site and the information contained herein have been prepared for educational purposes only. The information on this blog does not constitute legal advice, which would be dependent upon the specific circumstances of a particular case. In addition, because the law can vary from state to state some information on this site may not be applicable to you.
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