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Estate planning considerations for new parents

On Behalf of | Jun 1, 2024 | Estate Planning

Bringing home a new baby is a time that’s filled with changes and figuring out how to make things work. While new parents might rightfully be focused on their little bundle of joy, they need to think about what the baby’s future might hold. 

One thing that new parents need to do is to set their estate plan so they can outline things related to their child if both parents pass away. There are several things to think about in these cases. 

Guardianship designations

Parents can say who they want to raise their children by naming them as guardians. The guardian designee should be someone who shares similar values to the parents and who understands how the parents want the child raised. It should also be someone who can keep up with the demands of raising a child. It’s a good idea for the parents to talk to the guardian to ensure the person is willing to take on the responsibilities. 

Financial matters

Raising a child is a costly endeavor, so the parents may want to take steps to offset those costs. One option for doing this is establishing a trust that can be used to care for the child. The trustee can ensure that the proceeds are used for the creator’s children. Life insurance policies can also help with this, and they may be put into a life insurance trust. 

It’s best to consider all goals and options for meeting those goals. Working with someone who’s familiar with these matters is beneficial since they can review the options and help the new parent determine how to proceed.