For many people, the birth of their first child is also the first time they start considering an estate plan. Even people who do not have children can certainly benefit from a plan, but this is often the catalyst that causes people to think about it more carefully. They want to make sure that things go well for their child, even if they pass away unexpectedly.
Fortunately, there are some steps you can take to plan for your child’s future. Even though the future in general is unpredictable, having a plan in place can give you stability and peace of mind. Below are two areas to consider.
Setting up a trust
For one thing, it can be complex to transfer assets to someone who is still a minor. They may not be able to access those assets until they become a legal adult.
One tactic parents sometimes use to make this transfer is to set up a trust with their child named as the beneficiary. Even if you passed away while your child was still very young, the assets would be held for them in the trust, and a trustee could access the funds and authorize any necessary distributions.
Choosing a guardian
From a practical standpoint, you may also want to consider choosing a guardian in your estate plan. This person would take on many parental roles. They could gain custody rights to your child, provide them with a stable living situation, make medical decisions, make educational decisions and much more. Choosing the correct guardian is one of the best ways for you to know exactly who is going to raise your child if you are unable to do so yourself.
Drafting your estate plan
It is important to carefully consider all of your legal options when making an estate plan. It can help to work with an experienced attorney at this time.