Estate Planning Tips for Young Parents
This post was updated on March 24, 2022
You just brought a baby into the world, so you're probably not thinking about passing away any time soon. You want to think about all the great experiences you and your family have ahead of you. However, when tragedy sadly strikes, many young families are left without an estate plan in place.
It may sound morbid to start planning for the end of your life when you just welcomed a new one into the world. But it is essential to make sure your children are taken care of in the event you and the child's other parent cannot. Here's what new parents need to know about estate planning.
Use a Will To Protect Your Children's Financial Security
Sure, you could die without a will. But then it will be up to federal and state probate codes to distribute your assets, which could mean a lot more time, cost, and confusion for your loved ones. And why leave your children's inheritance up to the courts when you can take care of it yourself?
And a will doesn't just cover physical and financial assets like a house, car, and investment portfolio. Young parents are likely to have significant digital assets as well — photos, music, writing, and maybe even cryptocurrency assets — stored in the cloud or elsewhere. Many states have digital account laws that allow access to specific people after your death. You can also provide online and personal account information in a will so that beneficiaries can access your computer's hard drive or digital storage in the cloud.
And while a will can pass on your assets after your death, it can't create those assets before then. That part is up to you. Part of having an estate plan is building an estate, so make sure you have a retirement plan, whether it's a 401(k), Roth IRA, or some other investment option.
Use a Will To Name a Guardian
If something only happened to you, the child's other parent would get custody. But if something truly tragic happens to both parents, you want to make sure you have a will in place that names a guardian of you and your spouse, partner, or co-parent's choosing. Without a will in place, a custody fight could erupt between relatives. In some cases, it could mean a judge places the children in foster care.
Just like with your financial assets, you don't want to leave control of your children's lives in the hands of the court when you can take care of it yourself.
A Will Isn't Everything
A will is a great place to start your estate plan, but it likely won't comprise your entire estate plan. A living will covers end-of-life decisions should you become incapacitated. You may also want to consider granting someone power to make health care decisions on your behalf in a health care directive. A financial power of attorney naming someone to manage your finances if you cannot is also an important part of any estate plan.
These documents can explain what you want to happen if you are incapacitated or unable to make medical decisions on your own. If you're married, your spouse would be the default person to make these choices for you. You can choose someone else if you wish, however.
The good news is that in the midst of this busy, sleepless new phase of your life, you can create an estate plan from the comfort of your couch. Using FindLaw Legal Forms & Services, you can create a will, financial power of attorney, and health care directive and living will at home and for less than going to an attorney. The documents will be tailor-made for your wishes and adhere to the laws of your state.
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You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.