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Estate planning is a must for new parents

| May 19, 2020 | Estate Planning |

Welcoming a baby into one’s home can be an exciting, albeit frightening thing. It is natural to want to protect children from all the bad in the world, but not all parents in New Jersey or elsewhere take steps to safeguard their kids in the event they are no longer around to care for them. While no one thinks that estate planning and starting a family go hand-in-hand, they certainly do.

There are at least three estate planning steps that new parents may want to consider doing to ensure their children are protected should the unthinkable occur. The first is to write a will that includes the name of the individual who one would like to act as guardian. If this step is not taken, a judge will get to make this decision.

The second is to consider setting up a trust. Children younger than 18 are not able to take direct control of any inheritance left to them. By setting up a trust, one can leave strict instructions for how assets are to be used for the child or distributed to the child when old enough. One will also be able to designate a person of trust to be the trustee.

Finally, the third step is to ensure beneficiary designations are up to date. When significant life changes occur, who one has listed as the beneficiary on individual accounts may need to be modified. It is possible to add one’s child as a primary or secondary beneficiary to ensure that assets are passed on to them.

Having a baby in the home may leave one feeling overwhelmed and short on time. Understandably, estate planning is not at the top of one’s to-do list. For new parents in New Jersey, with the assistance of legal counsel, creating an estate plan does not have to be a difficult or time-consuming thing.