The birth or adoption of a child is a joyous occasion. It is also a time to create, review, or update your estate plan so that your child is provided for after your death.
Name a guardian in a will
Even if money is tight right now, you need to name a guardian for your child. This person will take over parenting duties if you and your spouse die. You should name the guardian in a will. Be careful about naming both a husband and a wife as guardians because if they get divorced, you must redo your will. It is best to name a backup person if the first one cannot carry out the duties for some reason. You can also name a trustee during the estate planning process if you think the person the child would live with may not be great at handling money.
Create a trust for the minor child
Your will does not govern retirement account assets: You must name someone as the beneficiary of these funds. One option is to create a trust that your retirement account will fund if you die. You can create the trust now without putting any money into it. Ensure you name a trustee to oversee the account.
Get a Living Will or a Power of Attorney
Part of your duties as a parent is to ensure that you take care of yourself. Therefore, you should have a living will or a power of attorney. This gives a person you trust permission to act if you become incapacitated or die.
Having a baby is an exciting time, but you also need to create a will, a living will and a power of attorney in case you do not get to see that child reach maturity.