Becoming a parent is one of life’s most rewarding experiences, but it also comes with substantial financial responsibilities. Raising a child is expensive, and when you are busy providing for their basic needs, it is easy to delay one thing that is just as important: planning their future.
While focusing on daily essentials like diapers and feeding schedules, it is also crucial to consider the long-term security of your family. After all, estate planning is not just for the wealthy and older adults; it is also a vital step for every new parent.
Secure your children’s future
Estate planning involves more than just allocating your assets; it ensures your children are cared for in ways that reflect your values and beliefs. According to recent estimates, raising a child born in 2023 can cost between $16,227 and $18,262 a year. Establishing your plans early can help ensure you meet their needs and protect their financial security, even if unexpected events occur.
For instance, you can set up guidelines and appoint a guardian in your will and use trusts to earmark funds for specific purposes. Additionally, through powers of attorney, you can ensure that someone you trust manages your finances and makes critical decisions about your children’s care if you are ever incapacitated.
Control the distribution of your assets
Your will serves as the cornerstone of your estate plan, empowering you to dictate the distribution of your assets after your passing. You can specify everything from the allocation of financial resources to the distribution of personal keepsakes. In the absence of a will, the state steps in to allocate your assets through the probate process. This can often result in higher costs, a prolonged process and stressful legal disputes for your family.
Utilize key estate planning tools
A well-executed estate plan can address specific concerns or special needs within your family. Whether it is setting aside funds for education, allocating resources for a child with special needs or ensuring that the family’s house stays within the family, there is an estate planning instrument that can help you ensure that your wishes are legally enforceable.
As a new parent, you are probably still navigating the new joys and responsibilities that come with bringing a new life into the world. However, it is important to remember that parenthood extends beyond meeting the demands of today. It is also crucial to protect your family’s financial future, no matter what challenges life brings.
