It can be an exciting time if you’ve recently become a new parent in California. In addition to stocking up on diapers, it’s essential to reflect on the future now that you have a child. Focusing on your estate plan will ensure a guardian is chosen and the appropriate beneficiaries are listed.
Choosing a guardian for your child
Now that you have a child, it’s critical to name a guardian in your will. This person will make all of the important decisions regarding your child’s welfare if you die while they are still a minor. Where they will live and how they are raised will be the responsibility of their guardian.
Using a living trust to protect your child’s financial welfare
Utilizing a living trust in your estate plan is an excellent way to help ensure your child is protected financially. In it, you will designate a trustee. This individual is in charge of making financial decisions in the best interest of any children you have. When you leave behind minor children who cannot make critical financial decisions independently, choosing this option helps ensure the money you leave behind is spent correctly in raising them.
Naming your child as a beneficiary
When you have a minor child who cannot make financial decisions, you won’t want to name them as a beneficiary if you have financial assets, such as a home, stocks or bonds. Placing these assets in a living trust is a better option. It is also likely, that you’ll name your spouse as the primary beneficiary. However, if you both die simultaneously, your assets will be managed in the trust until your child turns 18.
Using a living trust can be highly beneficial when you have a child. Incorporating it into your estate plan helps ensure your children’s welfare is the best it can be the future if you’re not in their life.