There are many reasons why you may need to draft, review or update your estate plan. One common reason is if you have a child. While even single individuals can still benefit from estate plans, the birth of a child is often a triggering event that causes people to think about it a little more carefully.
The clear reason for this is simply that they now have a direct descendant who will inherit their assets. They want to make sure there’s a plan for how this should take place. But below are two specific reasons to consider, demonstrating why estate planning is so important at this critical time in a person’s life.
1. Setting up a guardianship
First and foremost, parents have to consider the fact that they may pass away while their child is still a minor. If that happens, who is going to raise the child in their stead? Part of estate planning may include setting up a guardianship and choosing the appropriate guardian to step into a more parental role. This can streamline the process, give the child more stability, and ensure that the parent knows who will raise their child if they can’t do so.
2. Putting assets in a trust
Another thing to consider is that children typically can’t inherit assets until they turn 18. This means that the estate plan may not be as simple as just writing a will stating that a child should inherit their parent’s possessions. Instead, the parent may need to set up a trust, which can then hold tangible or financial assets until the child is old enough to inherit them.
These are just a few of the things to consider. As you look into all of your estate planning options, be sure you know what legal steps to take to set up a plan that addresses your family’s unique needs.