Estate Planning for New Parents
There are many ways your life changes when you are a new parent. Something new parents should think about is creating or updating their estate plan. A comprehensive estate plan can give you peace of mind knowing that your assets will be handled according to your wishes and your children will be taken care of. Though it may seem like a daunting task, an experienced estate planning attorney can provide new parents with what they should anticipate when expanding their families and the various documents needed for an effective estate plan. Here are some important steps to consider while estate planning for new parents.
Make a Will and Name a Guardian and Conservator for Your Child
Probably one of the most important concerns when estate planning for new parents is to make sure their child is cared for properly. A Will is an essential part of any estate plan and is particularly important for parents of minor children. It is a document in which parents not only can appoint a Personal Representative to distribute their property at death but also is a document in which they can name a guardian and conservator for their minor children should something happen to both parents. A guardian is responsible for a child’s day to day needs while a conservator manages assets for a child and deals with their financial needs. One person can be named to be both guardian and conservator.
Name a Successor Personal Representative in Your Will
When each parent creates a Will, they appoint a Personal Representative (sometimes referred to as an “Executor”) who will distribute their property according to their instructions. Typically, parents appoint each other to be their Personal Representative to distribute assets at death but each parent should also appoint a successor Personal Representative in their Will should something happen to one of them and the other parent is unable to act. The person appointed should be a trusted person because a successor Personal Representative may have a great deal of control of the parents’ assets that were left to their children.
Consider Creating a Living Trust
When estate planning for new parents, parents may want to consider setting up a joint Living Trust for distributing property and assets to their child. A Trust is more flexible than a Will and gives parents more control over the distribution of property and assets to their children. The trust document provides a distribution plan that outlines both parents’ wishes concerning who will receive their assets and how the assets will be distributed. For example, the trust may instruct a successor trustee, who will manage the Trust if both parents are deceased, to distribute all or portions of trust property when a child reaches a specified age. In addition, a Trust can save time and money because a probate estate does not have to be opened with the probate court in order for trust assets to be distributed to the beneficiaries of the trust. Typically, Joint Living Trusts can be revoked or amended during the lifetimes of both parents and then become irrevocable upon both parents’ death.
Create Durable Powers of Attorney for Financial Matters and Designate Patient Advocates.
All adults should appoint trusted persons to make financial and medical decisions on their behalf should they become incapacitated. This becomes even more important when you have children. Typically, parents appoint each other to be the person to make financial and medical decisions on their behalf if they become incapacitated. However, each parent should also appoint persons to be successor power of attorneys (agents) and patient advocates should something happen and the other parent is unavailable. This will help to ensure that bills and expenses are addressed for both the parent and children.
Check the Beneficiary Designations on All Accounts and Policies
Parents should not forget to check the beneficiary designations on their bank, financial and retirement accounts along with any life insurance policies and annuities they have. Depending on the circumstances, parents may want to consider listing their children as beneficiaries or successor beneficiaries on the accounts or policies. Parents can set up the accounts so that upon the death of the parent holding the account or policy, the assets will pass directly to the children if the other parent is predeceased.
Schedule a Free Consultation with Bill Ager for All Your Estate Planning for New Parents Needs
At Ager Law Office, Bill Ager helps individuals and families with all aspects of estate planning, including Wills, Trusts, Durable Powers of Attorney for Property and Financial Matters and Patient Advocate Designations. From his Ann Arbor office, Bill Ager serves clients throughout Washtenaw County. To schedule a free consultation for a basic or comprehensive estate plan, or for updating your existing plan, call (734) 649-0784, send an email to email@example.com, or use the online contact form on this website.