Having children is a life-changing event in many ways. In the commotion of it all, don’t forget to plan for the future with estate planning documents.
The Estate Planning Starter Kit
Most attorneys will agree that in order to truly care for and protect your new family, consider creating, at a minimum, the following estate planning documents:
- Last Will and Testament: A complete Last Will and Testament should clearly outline the following:
- The Executor or Personal Representative
- The Beneficiaries (usually your spouse and/or children)
- Instructions for How and When to Distribute the Assets
- Guardians for Minor Children (these are the people that will care for your children if you are unable to do so)
- Financial Power of Attorney: Name the person(s) who can make financial decisions on your behalf.
- Healthcare Directives: Healthcare directives are a compilation of three specific documents:
- Healthcare Power of Attorney
- Living Will
- HIPPA Authorization
- Consider a Living Trust: You’ll still have the above documents and the protection they offer, but there are other benefits that a Living Trust can provide:
- Avoid Probate
- Harder to Contest
- Continuity (continues to operate after your death)
- Privacy
Life Insurance Policies
In an effort to make sure your family is cared for financially, consider a life insurance policy. A general rule of thumb is to take out a policy that is 20x your income.
Beneficiary Designations
Perhaps the easiest way to plan for your estate is to name beneficiaries on all accounts where such a designation is possible. In general, this means that the assets held in that account will pass to the person(s) you name upon your death, most likely your new spouse. Common accounts that allow for beneficiary designation include:
- Bank Accounts
- Retirement Plans
- Life Insurance Policies
Hire an Attorney
Do-it-yourself estate planning services might seem like an inexpensive and “good enough” option. However, you should always hire an attorney to help create legal documents. The do-it-yourself forms rarely account for the specific needs of new parents.
Update Frequently
It is recommended you review and/or update your estate plan every 3-5 years, or at any major life event. So, what constitutes a major life event?
Familial changes
- Marriage/Divorce
- Birth/Adoption
- Addition of Stepchildren
- When children turn 18
- Illness/Disability
- Familial Deaths
- Death of a named guardian/trustee/personal representative/agent
Financial changes
- Career change
- Substantial increase or decrease of assets
- Change in life insurance coverage
- Purchasing a home
- Taking out a large loan
- Receiving a large inheritance or gift
- Retirement
Legal Changes
- Changes in state Laws
- Addition of new state laws
- Moving to another state
Each of the above familial, financial, and legal changes require the knowledge of an experienced estate planning lawyer.
If you are a new parent and interested in creating an estate plan, contact Kamper & Estrada, PLLC today. Our experienced estate planning attorney offers free one-hour consultations.
