Many young adults lack estate plans. If you count yourself among them, you may find it particularly important to create one once you bring a son or daughter into the world. Creating an estate plan gives you a chance to decide what you want to happen in the event that something happens to you, and it helps you make preparations for how your child would fare under these circumstances.
While a solid estate plan should have a number of important elements, some are of particular importance once you have a child. When creating yours as a new parent, consider taking the following actions.
1. Decide on a guardian
If your child’s other parent is in the picture, he or she would likely assume responsibility for your son or daughter if something happened to you. It is still wise to have an alternate guardian in place, though, in the event that a car crash or something similar were to claim the lives of both of you.
2. Make your own advance directives
You should also create a health care directive and give someone power of attorney when you have a child. That way, if something happens to you, you have someone to make critical medical decisions on your behalf. Having a power of attorney in place gives someone you trust the ability to make financial decisions and allocations on your behalf if you are unable to do so.
3. Adjust your will and beneficiary designations
You may want to feature your child prominently in your estate plan. This might involve updating your will or other beneficiary designations to include your new son or daughter.