The timeline for becoming a parent is not the same for everyone. At the age of 48, you became a father. As a late-in-life parent, you will face the same challenges and tasks as any new parent.
That means waking to feed the baby at all hours of the night and making sure your child is safe, fed and clothed. But as a parent who is sometimes mistaken as your child’s grandparent, you have a few additional concerns. This is why estate planning should get prompt attention.
Update your will, create a trust, invest in 529 plan
As a late-in-life parent, you should consider taking these steps in estate planning:
- Update your will: The birth of a child is among the life events that should lead anyone to update his or her will. Not doing so could lead to complications for your estate and child.
- Name a legal guardian for your minor child: With an estate plan, you do have to think of your own mortality. The likelihood that you will die well before your child is strong. Choose the right person who shares similar values as you, has good financial standing and the willingness to take on this responsibility.
- Have a testamentary trust in your will: This trust goes into effect once you die. The trustee you name manages the assets and provides money in increments to your child. You decide the exact age that your child will receive the total amount of the assets. This is a safeguard measure that may prevent your child from making less-than-stellar financial decisions in early adulthood.
- Create a trust: There are many different types, including living, revocable and irrevocable trusts. Many beneficiaries may benefit from a trust. That list includes children from second, third and fourth marriages.
- Purchase of life insurance policy: You likely will be paying more in monthly premiums than a younger parent. If you obtain such a policy through your employer, though, it likely is much more affordable. But a life insurance policy provides a good safety net. Naming your child as one of or the sole beneficiary is a move you should also make.
- Keep contributing to your retirement investments: This list includes IRAs, 401(k), 457 and 403(b) plans. Once again, name your child among the beneficiaries of your retirement plans. The designations for retirement plans and insurance policies take precedence over a will.
- Create a 529 college savings plan: Make regular contributions to this plan, which will pay for your child’s education costs.
These matters represent a solid start. You want to take care of your child, so do not neglect your estate plan.
Tend to your child and estate plan
For you, the timing was right in becoming a parent. You understand the responsibilities and take them seriously. While you tend to your child’s needs, make sure to give attention as well to your estate and estate plan.