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Why do new parents need an estate plan?

On Behalf of | Jan 10, 2024 | Estate Planning

Every adult should have an estate plan in place. While it is entirely up to you whether or not you have one when you are childless, once you have one, you have a responsibility towards them. That responsibility will last until they turn 18, and while an estate plan is not obligated by law, it can help you to fulfill your responsibility to your kids.

Someone has to care for your children until they turn 18 if something happens to you. As such, the very least you should do is name a guardian who can take on the legal responsibility if you die before your child turns 18. While their other parent will (very likely) be first in line, you need to have someone else lined up just in case you both die at the same time – which could easily happen if you travel together in the car occasionally, for example.

What if you do not name a guardian?

If you do not choose a guardian, a court will choose who fulfills that role if events demand it. As the judge probably does not know you and your family from Adam, it’s clearly to your child’s advantage that you pick someone you know and trust.

Your estate plan can outline financial support for your children

Minors cannot fend for themselves as they are meant to be at school. They also cannot inherit directly while they remain underage. So, you need to look for a way to financially support your child if you die before they turn 18.  One option is putting the assets you would leave them into a trust, which someone you choose will manage for your child’s benefit until a time of your choosing. That could be until the child turns 18 or any other age you specify, as 18 is still very young to inherit.

Hopefully, you will never need to use these aspects of your estate plan, but it is better to be safe than sorry.