Not many life experiences are as fulfilling as becoming a parent. But becoming a parent also comes with its share of responsibilities. Besides loving, providing and caring for your child, one of the most important steps you need to take is to include them in your estate plan.
Your child is your dependent and, thus, entitled to your estate should something happen to you. This is why you need to update your estate plan as soon as you become a parent.
Here are two estate planning updates you need to make when you become a parent:
Create or update your will
A will is basically the building block of any estate plan. This estate planning tool not only protects you and your estate in the event of your demise but also protects your child. Without a will, California intestacy laws would determine how your assets are distributed. And there would be no guarantee that your child would walk away with what you would like them to inherit.
But a will does more than just distribute your assets. When you become a parent, you need to designate a guardian for your child too.
Set up a trust
Just like a will, a trust allows you to pass down assets to the people and causes you care about. By setting up a trust and adding your child as a beneficiary, you will be taking deliberate steps to protect your child’s financial future. And the best part is, any asset that is held in a trust does not go through probate.
Having a child is a significant life event, one that comes with a ton of life changes. Setting aside time to create a will is one of the most responsible things you can ever do, especially if you become a parent.