The birth of a child changes everything, including how you see the future. Now, it is not only about you but also about providing the best possible life for your little one. That includes planning for a time when you might not be around.
For new parents in Texas, estate planning becomes an important step toward securing their child’s future.
Draft a will
In Texas, a will serves as a legal document that outlines how you wish to distribute your property and assets after your death. Importantly for new parents, a will allows you to name a guardian for your child. Without a will, the court will decide on a guardian. Therefore, it is important you make a will and keep it updated as your life circumstances change.
Establish a trust
A trust can help manage your assets. One example of a trust you can choose is a revocable living trust to hold your assets for your child. You maintain control of the trust while alive, and it transfers to your child when you pass away.
The benefit of a trust is that it helps to avoid probate, making it easier for your child to access their inheritance.
Consider life insurance
Life insurance provides an extra layer of financial protection for your child. In Texas, life insurance proceeds are generally exempt from creditors, ensuring that the money goes to your child rather than to pay off debts. Choose a policy that suits your budget and financial goals.
Designate beneficiaries
On retirement accounts and life insurance policies, you have the option to name a beneficiary. This person receives the account or policy proceeds upon your death. As a new parent, you might want to name your child or their guardian as the beneficiary.
Preparing an estate plan helps safeguard your child’s future, ensuring you can take care of them even when you are not around. Remember, the best gift you can give your child is a secure future.