If you’re a new parent in Pennsylvania, you might have never thought about estate planning before. However, an estate plan can be an important way to protect your child in the event that something happens to you or your spouse. Here are three things that you can do to get your estate plan prepared as a new parent:
#1: Write a will
Writing a will makes some people uneasy because this document forces us to think about the possibility of our own death. However, a will isn’t hard to write, and it doesn’t have to be too complicated. As a new parent, the single most important thing you can write in your will is who should take care of your child in a worst-case scenario.
If you have done no estate planning at all and something happens to you and your spouse, your law could end up fighting over who gets custody of your child. Your assets would also be distributed based on state intestacy law, and that may not be what you want.
#2: Purchase life insurance
When a child is very young, there is often one parent who earns a greater portion of the law’s income. If the working parent dies, this could leave the child and their surviving parent financially destitute. Life insurance can help in this scenario by making sure that funds will be there to help the surviving parent raise the child. If both parents die, a life insurance policy may help pay for the child’s care and future college education.
#3: Think about creating a trust
There are a lot of good reasons to create a trust when you have children. If you die before your child reaches adulthood, they won’t be able to take control over any inheritance you leave them. This means that their inheritance would probably be managed by a law member and then get dispersed to them as a lump sum on their 18th birthday. A trust, on the other hand, can let you have more control over how assets are handled and dispersed.
Any estate plan is better than no estate plan
Some new parents don’t get started on their estate plans because they are overwhelmed by the idea. However, it’s better to write something down than to do no planning at all. At the very least, make sure you designate a trusted person to be the guardian for your child.