Most aspects of your life will change dramatically when you have children, and your estate plan is no exception. You will need to make significant changes to the documents you already have or finally make the effort to create an estate plan if you have procrastinated about doing so thus far.
The goal of creating or updating an estate plan when you become a parent is to fulfill your obligations to your children even if something unexpected might happen to you. If you draft or update the appropriate estate planning documents, you will be in a good position to offer your children stability and protection regardless of what the future holds.
People frequently use their wills to designate the recipients of their major assets. However, a will is also where you can name a guardian to take care of your children. Selecting a guardian is a key step for parents thinking about the future safety of their children.
In theory, a will could be a way for you to leave financial resources for your children. In practice, leaving a direct inheritance to minors can be a bad choice. The guardian who cares for your children will have access to and control over their inheritance and could waste it or embezzle from it before your children become adults.
A trust allows you to limit what a guardian uses the inherited resources for and how much they can spend. You can ensure that there is something still set aside for your children when they come of age.
Advanced directives and/or powers of attorney
There could come a time when you are technically alive and yet unable to take care of your children or maintain the home where you live.
Either due to cognitive impairment or unconsciousness, you maybe come dependent on others to take care of your financial obligations or make medical decisions on your behalf. Including documents that talk about your medical preferences and designating individuals to pay your mortgage and make those medical choices for you will help ensure that your children have proper protection as well.
Becoming a parent will require some estate planning changes, but adding the right documents to your estate plan can give you peace of mind and help you better protect your children.