Every adult should have an estate plan. But some life changes can make the need for it even more urgent. And one of them is becoming a new parent. When you have a child, it’s crucial to protect their future using an estate plan.
Here is how you can do this:
Name them as a beneficiary
Drafting an estate plan allows you to name your child as a beneficiary. This way, when you die, they will inherit the assets you specify in your will. You don’t need assets worth millions of dollars to begin inheritance planning. The assets you currently have can benefit your child considerably. Besides, you can update your estate plan when you acquire more assets.
Name a guardian
An estate plan is essential for new parents because they can name both a guardian of the child’s person and a guardian of the child’s estate. The guardian of the person is someone who will raise their child if they become incapacitated or die while the child is still a minor. New parents have the opportunity to look among their loved ones for someone they believe will raise their child as they would. A guardian of the estate would be in charge of the child’s assets. They can be the same person, but do not have to be.
If parents die before the child reaches the age of majority in Pennsylvania, which is 18, the assets they leave behind will have to be held by someone other than the child, so it’s a good idea to nominate the person or people that you choose, rather than to make the court decide who should be in charge.
Set up a living trust or testamentary trust
New parents can potentially set up a living trust for their child when estate planning. With this option, you can place conditions on your assets and how they should be distributed. For instance, you can specify the circumstances that must be met before your child accesses their assets. Additionally, living trusts generally don’t go to probate, making them more private. Testamentary trusts, which are created in a will, are another viable option.
Estate planning becomes even more crucial when you become a parent. Seeking legal guidance can help you protect your child’s future using an estate plan. Contact our experienced estate planning attorneys to discuss your situation today.