The baby room is ready for your new little bundle of joy. You have a stockpile of diapers, formula and cute outfits, and, of course, you have plenty of love to offer your newborn.
Did you forget about estate planning? It is never too early to start preparing for the long-term future of your child.
The importance of insurance and trusts
Sometimes it is a good idea to think the worst. If you or your partner dies, life insurance can help support your child as he or she grows. If both of you die, insurance will provide for your child through early adulthood.
Term life insurance makes the most sense for many parents. It is both affordable and covers your newborn until he or she is an adult.
A trust is another option to provide for your child if you die before he or she is 18. It gives you control over asset management, the use of assets and when your child receives them. Without a trust, a judge who does not know your wishes must name someone to manage your finances.
The importance of a will
As a parent, a will is critical for naming a guardian for your children. You can lessen the risk of an ugly custody battle among relatives. Picking a guardian who cares about doing right by your child also brings you peace of mind.
If you already have a will — and you should — update the beneficiaries to include your new child. Do the same for other accounts with beneficiaries, such as retirement savings.
The birth of a child changes everything in your life. Among other things, it calls for a full review of your estate plan.
The importance of the future
A new child means a wide range of new responsibilities. Some are right in front of you, but some hide in the fine print.
An estate plan that provides for your new child eases doubts you may have in the back of your mind. You can protect your child by leaving a loving legacy.