New parents have a lot on their plate preparing for their first child. With all of the changes to make in their lives, California parents might neglect to update their estate plan right away. However, it’s vital for parents to update their estate plan after welcoming a new child to their lives. Having an estate plan that includes your new child can keep him or her taken care of in the event of the unthinkable.
How do you update your estate plan?
The biggest thing that needs updating in your estate plan after welcoming a new child is the beneficiary designations. You’ll want to include your new child on the list of beneficiaries who will inherit your assets after your death.
For children who are under 18, you’ll also want to establish who will take care of them until they turn 18. Most often, this will be godparents, grandparents or an aunt or uncle.
Whoever you establish as guardian of your child in the event of your untimely death will ultimately end up managing your assets. This is something that can be changed in your will; for example, you want your grandparents to raise your child but your friend to manage your assets until your child turns 18.
Why are estate plans important?
Having an updated estate plan is crucial in order to be best prepared for the worst. Without an estate plan, most of your belongings can be stuck in probate instead of being used to take care of your child.
If you don’t have a plan for your underage child, then it could lead to lengthy custody battles between remaining family members, which can be a huge emotional toll on your child. That’s just another reason it’s important to update your estate plan regardless of how hard it is to have those conversations.