It’s both a joy and a stressful moment to become a new parent. The happiness brought in by your bundle of joy is there. Beyond all the excitement, however, is the anxiety about the future.
No parent can ever predict what the future holds. But every parent is at least unanimous in one thing: they want to give the best that they can for their children.
There are many things that parents do to secure their kids’ future and make it less murky.
That preparation process begins even during that first instance of becoming parents while they’re young. One of those most effective measures is through what’s referred to as estate planning.
To help clear out any cloud of confusion you may have as new parents, here are four things to know about estate planning:
- Hiring A Lawyer Is Necessary
Even if you’ve read through so many resources online about estate planning, there’s no dispute with all the help that having an estate lawyer can bring. In fact, it’s an absolute must to have one when you make your estate plan.
Remember that estate plans take effect only upon the death of either parent. This means you won’t physically be there anymore to defend the contents of your estate plan.
To ensure everything is in order and no legalities have been skipped, it’s an absolute must to have an estate lawyer.
They’re experts in estate planning. Hence, you have that assurance that in your absence, your estate plan won’t be questioned and it can take full effect without hindrances.
- Necessary Components Of An Estate Plan Should Be Present
An estate plan is typically made up of six components. To make it more effective, then it’s at least integral to meet these six components:
- Will. This is one of the most well-known parts of an estate plan. It determines two things: the first is who that individual you’ve appointed is to step in your shoes to distribute your assets and pay any liabilities.Second, it gives specific instructions for the personal representative on how to go about distributing your assets.
With technological advancements, you can actually enjoy the convenience of making a will online. Sites like Willed can help you out.
- Trust. This refers to a separate legal entity from the person who holds it and places certain assets on hold for the named beneficiaries. There are many types of trusts, and this is a matter for you and your lawyer to decide on.
- Power of Attorney. This is a document that names someone to do the job of managing your finances, in the event you become incapacitated to do so or have died.
- Healthcare Directives. This refers to the set of instructions you have in place for your family to follow regarding your healthcare when the time comes for you to need one, and you’re physically and mentally incapacitated to decide for yourself.
- Regular Review And Revision. This refers to all the other new and revised versions of the estate, signed by you, as updates to old ones which you may no longer want to legally take effect.
- Beneficiary Designations. As its name implies, this is like a rundown of all your beneficiaries and what assets or how much will go into them.
- Naming A Guardian Is A Must-Do
Naming a guardian is one of the most important parts of having an estate plan, but it’s also one of those that’s easily neglected. Young and new parents shouldn’t skip this for the very reason that what you have right now are minor children.
Should something untoward suddenly happen to both parents, who will be named as the legal guardian of the parents? Court disputes can be prevented when parents have specifically named who the legal guardians will be.
Ideally, the legal guardian you state is that individual whom you fully trust to be capable enough to love, care, raise, and support your children in the manner that you would’ve, had you still been living.
- Attach Life Insurance Policies Is A Bonus
Purchasing life insurance may not easily be something that’ll first come to mind for young parents. It can be expensive, on top of all the payables you have to cover.
But if you’re like most young parents, you may not have enough savings and assets yet to substantially insure your children’s future.
Hence, a practical part of an estate plan is a life insurance policy. Each spouse should have their own policies. That way, you can leave more to your kids, should anything happen to you.
As you can see, creating an estate plan isn’t reserved only for the wealthy. Even with whatever little you may have as new parents, it’s always a good idea to have one. You can think of this as likened to getting into better shape.
It’s the best gift you can give to your children. Likewise, don’t rush into this process. Be sure you have an estate lawyer by your side to help you walk through some of the challenging technicalities that come along with estate planning.