When you welcome your first child, your life forever changes. For the first few months, you are busy caring for a newborn—figuring out how to soothe your child, feed them and survive some sleepless nights. While many parents do lots of research on the best car seat, stroller and daycare choice, they may forget about one very important aspect of becoming a parent: writing a will.
No one really likes to think about what may happen if they passed away suddenly, but when you are responsible for the care of a child, it’s necessary. Here are 5 reasons why:
- You can name a guardian for your child. If you don’t name a guardian for your child, the court will appoint one. Often, parents choose family members or close friends as a child’s guardian. Parents should choose someone who shares their values, who would raise their children as they would. Whomever you choose, make sure to talk with them and ask them if they are willing to be your child’s guardian because it is a big responsibility.
- You name your child as the beneficiary to your assets in your will so all your assets will go directly to them. This saves expenses and time and avoids the state becoming involved in dividing your assets.
- You can establish a trust for your child, which will hold all your assets—retirement accounts, life insurance policy payouts, investments—in a trust that someone will manage for your child while they are a minor. You also can set up the trust to given to the child at a certain age, often after 18, when they are older and are more likely to manage the money better.
- You can name someone to manage the trust for them in the meantime. Sometimes, you may choose their guardian for this job. They will be responsible for many of costs of raising your child. However, if you feel someone else is more financially savvy, then you may want to establish that person as the manager of your child’s trust.
- You can draft a power of attorney. This part of estate planning appoints someone to make decisions for you should you become mentally incapacitated to make decisions on your own. You could name whomever you trust to handle financial affairs for you and your child as your power of attorney.
With a will in place, you put in place a plan for your child if you pass away suddenly. You then can have peace of mind that your child will be taken care of well and by the people you trust most.