If you are expecting a baby or recently became a parent, you know how much preparation is involved in this journey. You may have researched and shopped for baby essentials and selected a childcare provider, but you should also be thinking further ahead into the future.
One essential item that should also be on your new parent to-do list is making an estate plan and meeting with a knowledgeable New Jersey estate attorney. Even new parents who are young and healthy should establish an estate plan so that their child is well-cared for and has a secure future if the worst occurs before they grow up. Here are a few essential steps all new parents should take to help ensure their children are provided for in the event of their death or disability.
Purchase a Life Insurance Policy
Raising children is a rewarding yet costly endeavor. If one or both parents die, a life insurance policy provides monetary stability to raise children or to pay for their education.
Term life insurance is often the best option for parents. Policy premiums for term life insurance are usually quite affordable, and the coverage will last until the child becomes an adult and can be financially responsible. However, keep in mind that if you have a child with special needs who will need ongoing care, a whole life insurance policy might be a better option, as it can help with lifelong care. You may want to discuss the specifics of your situation with a New Jersey estate planning lawyer to help determine what type of life insurance coverage you should consider.
Create a Will and Select a Guardian
No matter how much or what type of assets a couple has, they should draft a will with the purpose of naming a guardian for their children in their absence. If both you and your spouse were to pass away while your children were still minors, a will allows you to dictate who will care for them. If there are no guardians named, family members may fight over who should become their guardian, and the court may have to decide for them.
You should name a legal guardian in your will as soon as your child is born. By doing so, you can select someone you believe will raise your children, similar to how you would.
Update Account Beneficiaries
It is likely that you have some accounts with named beneficiaries such as retirement accounts or death and disability insurance. If you want your children to inherit these types of assets, you will need to add them to the accounts as beneficiaries. Most parents choose to leave a spouse or another adult as the primary beneficiary and add their children as secondary beneficiaries.
Consider a Trust
You may also want to discuss creating a trust with a well-versed estate planning lawyer in New Jersey. In the event of your death, before your children turn 18, your children cannot legally take control of any inheritance you leave to them. In some cases, the court will appoint someone to control any assets you leave to your child until they turn 18 and then have complete access to these assets. Some parents prefer to have more control and can do so with a trust. A trust allows parents to decide who will manage the trust assets, how the money and property will be used to benefit their children, and when their children should have access to that property.
Let an Estate Planning Attorney in New Jersey Help You
Call a New Jersey estate attorney from Lomurro Law today at 732-482-9285 or fill out our online contact form if you would like to learn more about planning for the future to protect your children and your estate. Our experienced attorneys can answer your questions and help you ensure that your children will have a secure future, even if you cannot be with them.