An estate plan is not just something that you need to leave money to your heirs at the end of your life. You don’t need to wait until you’re in your 60s or 70s to make the plan — even though a lot of people do it.
In fact, if you just had your first child, it’s already time to make a plan, even if you’re just in your 20s. Why is this so important? Read on.
Why an estate plan makes sense for new parents
First off, making an estate plan is a way of recognizing that the unexpected happens. You may have 50 or 60 years left, but you never know what will happen. Diseases and car accidents are common. It’s better to be ready, even well in advance.
Secondly, your estate plan allows you to choose a guardian for your new child. When you’re making a plan with adult heirs, you don’t have to worry about it, but your child has the next 18 years ahead. If you can’t be there for even part of that time, you need to know that someone you love and trust will be legally allowed to step in.
Finally, an estate plan gives you options to hold the money until your heir is older or to use it for specific purposes. You could put it in a trust, for instance, so that your heir gets it when they turn 25, or so that the money can only be used for college tuition. Essentially, you know you don’t want to leave your assets directly to a minor child, and making an estate plan allows you to choose what you do want to do in advance.
What do you need to do to get your estate plans started?
If it’s time to make that plan, be sure you are aware of the legal options at your disposal and the steps you need to take to protect your child’s entire future.