Posted on: 4 September 2018
Once you have a child, your obligations and life changes, and your estate plan should change as well. You want to make sure that you have an estate plan set up that will ensure that your child is taken proper care of in the event of your death or a health situation that makes it impossible for you to make your own decisions.
#1 Guardianship of Your Children
First, you need to establish guardianship for your children should something happen to you or your spouse. These are two different types of guardianship that you should consider.
The first type of guardianship is short-term guardianship. For example, if you were in an accident and not able to take care of your child for a short period of time or you get stuck in another country away from your children and don't have a way to take care of your children. This is someone who lives nearby and can get there to take care of your child in the event of an emergency.
The second type of guardianship is a long-term guardian. A long-term guardian is someone who you want to take care of your child if you were to die. This is someone who you would entrust to raise your child, not just take care of them for a short period of time. You can use your will as a place to establish your wishes of guardianship for your children should something happen to you.
#2 Life Insurance
Second, once you have a child, you need to look into a life insurance policy. A life insurance policy is a great way to take care of your child financially if something were to happen to you. Even after you die, you are still responsible for taking care of the financial needs of your child. A life insurance policy that puts the money in a trust for your child's care is one of the best ways to ensure that your child is fully taken care of and supported after you die.
#3 Living Trust
Third, when you have children, you may want to set-up a living trust. A living trust will ensure that your estate does not have to go through probate like it would with a will. With a living trust, you can also set up guidelines that will allow your assets to be distributed over time to your children. With children, you don't want to just give them or their guardian a large lump-sum; you want to spread out payment, so your child benefits from the money that you left behind for them.
When you have a child, you need to adjust your estate plan to take into account the needs of your child. Your estate plan should establish a plan for temporary and long-term guardianship of your child in an emergency situation or in the result of death. Your estate plan should contain a life insurance policy to take care of your child financially in the event of your death, as well as a living trust to give your child money over time from your estate.
For more information, contact your local estate planning service.Share