Attention, new parents! Between the diapers, the late nights, and the endless baby gear, estate planning probably isn't at the top of your list. But it's an essential part of planning for your family. No one wants to imagine the worst-case scenario, and having a plan in place gives you real peace of mind.
Use this checklist to make sure your growing family is protected. One rule for every item below: For each role you fill — guardian, trustee, agent, beneficiary — name a backup in case your first choice can't serve.
Protect your children
- Nominate a guardian in your will. Your will is where you name who would raise your children if both parents pass away. It's important for both parents to get on the same page here. Even if several family members would want the role, the court gives a parent's nomination great weight. Since a will only takes effect at death, also sign a standalone nomination so your choice is covered if you're both incapacitated.
- Set up a funded revocable living trust. For parents, a trust's biggest benefit is control. It holds your children's inheritance, lets you choose who manages it, and lets you decide when your children receive it, rather than outright at 18. It also helps your family avoid probate, and you can change it anytime while you're alive. A trust only works for assets that are actually placed in it, so ask your attorney what "funding" involves.
- Choose a trustee, not just a guardian. The person who raises your children doesn't have to manage their money. Some parents name the same person; others split the roles.
- Get or update life insurance for each parent. Losing one or both incomes can be devastating for a young family. When naming beneficiaries, don't name your minor children directly. If you do, the money may need court supervision and would pass to them outright at 18. Naming your trust is usually the better choice; talk with your estate planning attorney about the right setup.
- Review your beneficiary designations. Retirement accounts, investment accounts, and payable-on-death bank accounts pass according to their beneficiary forms, not your will or trust. An outdated form can override your whole plan. Make sure each one reflects your current wishes, and avoid naming minor children directly.
Protect yourselves
- Sign a durable financial power of attorney. This names someone to handle your finances if you're incapacitated. Without one, your family may not be able to manage accounts or property in your name alone, and could need to go to court for a conservatorship.
- Complete an Advance Health Care Directive. This names someone to make health care decisions for you if you can't, and records your wishes for care, including end-of-life wishes. Think carefully about who you'd trust with such an important role.
- Add a HIPAA authorization. This lets the people you choose speak with your doctors and access your medical information when it matters most.
Keep it organized
- Write a letter to your guardian. It isn't a legal document, but it's one of the most meaningful things you can leave. Share your values, your hopes for your child's schooling and faith, their routines, and the important people in their life.
- Make sure the right people can find your documents. Everyone you've named should know where your important papers are kept, so they can act quickly when needed.
- Review your plan regularly. Revisit it every few years, and after any major life change, like the birth of another child, a move, or a change in your relationships.
Can't do it all at once? Start here
Life with a new baby is busy, and that's okay. If a full trust-based plan will take a little time, start with the core documents: a will with a guardian nomination, a durable financial power of attorney, and an Advance Health Care Directive. These cover the most urgent gaps right away, and you can build out the rest of your plan from there.
When you're ready to check these items off your list, contact Meridians Estate Planning to schedule a consultation. We'd love to help you protect your growing family.