You and your partner are having a baby. You have checked off all the essential tasks on your list, but have you thought about estate planning?
No one likes to think about tragedy striking a young family, but not having an estate plan in place can make an unbearable situation worse for everyone. Now is the time to prepare for the long-term future of your child.
Why you need life insurance
If one parent dies, funding from life insurance helps provide for the needs of a surviving child. It also takes some of the burden off a grieving single parent. When both parents die, insurance offers for the care of a child until the orphan is a young adult.
Term life insurance is a good choice for most parents. For one thing, the cost fits almost any budget. You may want to consider a whole life policy if you have a special needs child.
Why you need a will
A will allows you to divide your personal belongings and other assets. For parents, though, a will is important because you can name a guardian for your children. This gives you control and peace of mind. You can appoint someone who shares your values and the interests of your children. You also avoid the possibility of an ugly legal battle among relatives who want custody.
If you already have a will, be sure to update its beneficiaries after the birth of your child. Do the same for any other accounts with beneficiaries, such as retirement savings.
Why you need an estate plan
It can be easy for parents to become overwhelmed and frustrated by the estate planning process. The issue is complex and emotional, and the temptation to procrastinate is great. However, life does not always allow parents to be around to watch their children grow into adulthood. An estate plan that includes a trust can assure a loving legacy for your child.