Bringing a new baby into your family is an exciting time. New babies mean a new lifestyle and new challenges for the parents. Parents will need to learn to balance their new obligations of taking care of their child or children with the obligations they’ve already had, such as work or caring for your home or other relatives. Planning for the child’s future is also an important step for new parents. Revisiting your estate planning goals and objectives is essential once you have had a new baby.
One important estate planning issue is for the parents to select a guardian for all minor children in case the parents pass away unexpectedly before the child reaches the age of majority. There are very important considerations for selecting a new guardian, including whether the guardian is capable of taking care of your child, emotionally, physically, and financially. You should also keep in mind that if you pass away before the other parent, the child will be placed with the other parent. This holds significance in cases where parents are separated, divorced, or no longer in a relationship. Even if you name a guardian in your Will, if the other parent is alive and fit to care for the child, the other parent’s rights will override the wishes expressed in your Will.
Another important estate planning consideration for new parents is the creation of a trust. A trust allows you to name a trustee who will administer the assets in the trust for the benefit of the child. You can dictate the terms of how the trust will be administered. For example, you can provide that the trustee must administer the proceeds of the estate for educational expenses for private high school or for college. You can also provide that the person who is the trustee is not the same as the person who is the guardian of the child. This can also have advantages where, for example, there are significant assets you want to leave for the benefit of your child but you are not sure the guardian of your child is financially responsible.
Call us today at 720-420-1777 to talk about your family and how we can help you plan for their future.