Becoming a new parent in California is an amazing experience, and you deserve to enjoy every moment of it. However, to provide for your child and take care of them in the best possible way you can, you need to do some careful financial planning. Keep reading to learn how to estate plan as a new parent.
Planning your estate as a new parent
Set up a will: This document outlines your wishes for what should happen to your assets in the event of your death. In your will, name a guardian for your children – someone that will take care of them and ensure they get what they need when you are not around. Ensure that the guardian you choose has a good parenting style, moral compass, same belief as yours, and physically and mentally able to take care of your children.
Set a trust: You also need to have a trust set up for your children. In your will, you will name a guardian, but in a trust, you will assign a trustee to your assets. A trustee is someone who will manage and disburse the assets according to your wishes. The essence of estate planning is to protect your hard-earned assets and ensure your loved ones are taken care of when you can’t. The best way to achieve that is through a trust.
Create life insurance and name your kids as beneficiaries in your retirement accounts: Life insurance coverage ensures that your children and spouse can maintain their standard of living after you are gone. There are three basic varieties of life insurance you can choose, i.e., whole life, term life, and universal life. Choose the best one that works for you and your loved ones.
Planning your estate as a new parent may seem daunting, but it is an important task to do. By taking the time to set up a will, life insurance policy, and trust fund, you can ensure that your family is taken care of financially if something happens to you.