Becoming a parent irrevocably changes someone’s life. They are now responsible for a child who has no ability to provide for themselves. Everything from the daily schedule for the family to the ability to get a good night’s sleep will suddenly change.
Parents who have just welcomed a new baby into the world or an older child into their family often feel overwhelmed by the responsibility they now have. They may find it difficult to properly take all the necessary steps to protect their new family member. Many new parents get so wrapped up in the practical necessities of daily life that they fail to look at the big picture. Estate planning is one of those big-picture considerations that new parents sometimes fail to prioritize.
Why is estate planning so important for new parents?
Children need support for decades
New children require regular financial investments and practical support. Parents make sure they receive appropriate medical care and eat a balanced diet. They also earn the money that pays for groceries and clothing. If a child’s parents die, they will be in a very vulnerable position. Estate planning helps new parents address both the social vulnerability of young children and the financial dependence of their baby. Parents can use a will as a place to name a guardian to care for their children.
They may also want to invest in life insurance or change the beneficiary that they named for an existing policy. Usually, parents also need to leave financial resources to meet their children’s needs until they reach adulthood or when they need assistance establishing themselves as new adults.
Some parents name their children as beneficiaries in a will. Many others may recognize the value of creating a trust to limit the use of resources by the guardian caring for their child. Every family’s circumstances are different, and parents will want to customize their plans based on their standard of living and any other factors that may influence the child’s health and happiness.
It can be rather challenging and also humbling to think about how to provide for a child if one were to die while that child is still a minor. However, parents who fail to take this step may constantly worry about their child’s security. Recognizing that it is a smart move to create an estate plan or drastically alter an existing one after a new child joins one’s family can help parents offer their children the best life possible regardless of what the future holds.