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What does having a baby mean for your estate plan?

On Behalf of | Jun 30, 2022 | Estate Planning

You may have created the basics of an estate plan when you turned 18 and could no longer depend on your parents to make your medical decisions in an emergency. By drafting advance directives and powers of attorney, you protect yourself in the event of medical incapacitation. You might have drafted a will when you bought a house or when you first married your spouse.

When you recognize that you are vulnerable or you have someone to protect, estate planning just makes sense. You can use legally-binding documents to dictate what happens to your property or who will manage your affairs while you are in the hospital.

Now that you are a new parent, you will have fresh concerns that could influence the best estate planning strategies. What changes to your estate plan are necessary now that you have a baby?

You need to think about their future

If anything were to happen to you and your spouse, your baby would need significant support. New parents often need to look at their financial circumstances carefully. They will also likely need to talk to their closest family members to choose a guardian to protect their children in the event of an emergency.

Having a child can be strong motivation to finally purchase life insurance or a reason to expand how much you carry. You may also want to update your beneficiary designations so that the money goes to your children. Speaking of which, you will need to think about their financial futures. Allocating assets to your children in your estate plan can help. So could creating a trust so that you control what happens to their inherited assets even after your death.

Your estate plan doesn’t exist in a vacuum

To create documents that adequately protect those that you love, you will need the help and cooperation of others. Discussing your guardian designations with the people you intend to name and getting support from professionals as you evaluate your insurance coverage and update your estate documents will help you better protect your children.

Addressing your changing estate planning needs when you become a parent will give you peace of mind and provide protection to the new child that you love.