So you just became a new Iowa parent. Congratulations! Undoubtedly estate planning is the last thing on your mind right now, but before you get too caught up in all the many things that being a good parent entails, stop and consider for a moment that estate planning is one of the most loving and protective things you can do for your new child.
If you and your spouse are young parents without an estate plan, now is the time to start one. If you already have wills and other estate planning documents in place, now is the time to review and probably update them to reflect your recent blessed event.
Estate planning considerations
Kiplinger advises that at the very least, you and your spouse should increase the amount of life insurance you have on your respective lives. Not only have your monthly expenses increased with the advent of your new baby, but the financial stresses one of you will face should the other die unexpectedly likewise have increased. Life insurance represents a quick and relatively inexpensive way to ensure that the money will always be there to properly support your child.
In addition to an increased amount of life insurance, you should also consider the following estate planning vehicles:
- A last will and testament for each of you that, among other things, designates the person(s) you want to care for your child in the event of you and your spouse’s mutual deaths
- A living trust designating your child as its beneficiary and the person(s) you want to manage the trust assets on your child’s behalf should you die before (s)he reaches the age of majority
- A special needs trust if your child unfortunately suffers from a birth defect or injury that will necessitate his or her continuing future care
- A tuition plan to ensure that money starts building up now for your child’s future education
Remember, if you make your trust the beneficiary of your life insurance policy, this will immediately fund the trust upon your death, plus avoiding probate in the process.
This is general educational information and not intended to provide legal advice.