Are you a new parent? Or a new grandparent? There is so much excitement and planning that comes with the addition of a small bundle of joy. Nine months of planning and preparation is hardly enough time to get ready for this life-changing experience. As people read “What to Expect When You’re Expecting” and fumble through the assembly of the crib, they often forget about how this new baby will affect their estate plan.
Many young parents often think that because they do not have many assets, they do not need to have an estate plan. This is far from reality. If something were to happen to these parents, a guardian and conservator would be named by the court. Parents should always sign wills naming a guardian and conservator. This is one of the most important decisions a parent can make in their estate planning – who will care for your child if both you and your spouse were to die? Who will be in charge of the money you leave for your child’s care and well-being?
In addition, it is probably the case that parents do not want to leave significant sums of money for their children to inherit at age 18 which would be the case if the money were to flow through a conservatorship. Therefore, parents should consider creating a Trust so that the money for their children can be properly managed for their children and distributed at later ages. If you are a new grandparent, consider adding provisions to your estate plan that would provide for your grandchild’s education, healthcare, or other matters that you think are important.
Another document that can be very helpful is a durable power of attorney for care, custody, and property of a minor. This document allows parents to appoint an agent to make decisions for their children regarding education, healthcare, property and government benefits. This document may only be valid for a maximum of 6 months. Parents often use this document when they travel together without their children, or if a parent is in the military.
As every parent hopes that they can always be healthy and present for the growth of their children, they can sleep a little easier knowing that they have the proper documents in place to take care of what matters the most in their life.