In all the excitement of becoming a parent, it can be easy to forget about planning your Washington estate. This is crucial, however, so that your baby is taken care of if something happens to you. It might seem like a complex subject, but preparing these documents is best for your child’s future.
Create your will
Creating your last will and testament is a good place to start estate planning as a new parent. You will want to choose guardians to raise your child if you pass away while they’re still a minor. Because you also wish to leave your child an inheritance, establishing a testamentary trust for their benefit is also wise. Minors cannot inherit assets until they at least reach their 18th birthday. A trustee, who can be the same person you name as guardian, can manage the trust until your child reaches the age of majority.
Buy life insurance
Many new parents buy life insurance policies as part of their estate plan. The best option is term life insurance, which is affordable. In the event that you pass away while your child is still young, your trustee can spend the funds from your policy in the way you have determined.
Check your beneficiary designations
Having a new child means you need to update your beneficiary designations. These supersede what’s mentioned in your will, so it’s crucial to look at all your financial accounts. However, avoid naming your minor child as a beneficiary because it could complicate things if you pass away early. Instead, naming someone who will be able to provide for your child’s needs, whether it’s the guardian, your spouse or a trusted sibling, is best. Be sure to name a contingent beneficiary as well in case your first choice passes away before you or with you.
Preparing your estate plan before your child is born can safeguard your new family.