Many couples become experts at planning during the process of becoming new parents – scheduling the birthing classes, planning the new nursery, even picking out a preschool. There is so much to think about before you welcome your new child.
Unfortunately, one of the most important things a parent can do to protect their child is often overlooked: an estate plan. Here are five important considerations you need to discuss with your estate planning lawyer when setting up an estate plan once your new baby is born:
Guardians and trustees. Parents who put off choosing a guardian for their children usually do so because they cannot agree on that “perfect” choice. Get comfortable with the fact that there is no perfect choice – because if you don’t choose one, a court will choose one for you. You can always amend your documents if you change your mind. When considering your choice for a guardian or trustee, you need to think about picking someone who shares your beliefs and who will already be a part of your child’s life. Also, it is important to make sure the person you choose is willing to take on the responsibility of raising your child if you are gone.
As your neighborhood estate planning lawyer, I offer a unique process for families with young children at home. Contact me to discuss how an emergency guardian plan can ensure your children are always cared for by people you know, love and trust if anything at all happens to you.
Education. The cost of college is already sky-high; can you imagine what it will be like in another 18 years? You probably want to start saving right away, either through a 529 plan or an educational trust so you can realize some tax benefits while you save.
Passing on your assets. Assets cannot pass directly to children under the age of 18, so you will need to think about setting up a trust and naming a trustee to manage the assets you would leave your children. Otherwise, the court will choose who will manage your children’s assets for them, and that person may not be the one you would choose. You also need to examine your beneficiary forms for retirement accounts and insurance policies to be sure your new child is included as a beneficiary. Even if you name them in a will, a beneficiary form for these accounts will determine who inherits.
Avoiding probate. Talk to your attorney about setting up a living trust so your heirs can avoid probate and assets can pass directly to them.
Asset protection. If you have an estate of more than $10.5 million, you will want to discuss asset protection strategies that will help you minimize taxes and protect assets for your heirs.
If you’re ready to protect your child through estate planning, call our office at (612) 206-3701 or fill out our contact form today to schedule a time for us to sit down and talk.
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