Becoming a parent is one of the biggest joys for any New York resident. Once you have a child, you should focus on estate planning to secure their future.
Create a will with a testamentary trust
Creating a will is one of the first steps you should take with your estate plan. It allows you to name guardians for your minor children in the event that you pass away while they’re still young. A testamentary trust is a good tool to include in your will. It can ensure that assets and property you leave to your child are secured until they are of age to inherit it. A trustee will oversee it and make sure that your child receives what you leave them. They can manage the assets and spend them for your child’s benefit if you pass away before your child reaches 18 years old.
Consider getting life insurance
All new parents should have life insurance for the benefit of their children. The best option is term life insurance, which is affordable. If you end up passing away, the funds from the policy are tax-free and your trustee can receive them and spend them in the way that you wished. The money can go toward your child’s college fund.
Update your beneficiary designations
Now that you have a child, you need to update your beneficiary designations to include them. However, it’s unwise to name a minor child as your primary or contingent beneficiary on your life insurance or investment accounts. If you intend to leave them funds from those accounts, name a trustee to manage the money or create a conservatorship to hold it until your child reaches the age of majority.
Estate planning is the best way to protect your child’s future. Make sure that you create and maintain an estate plan that ensures that your children receive the care and support they deserve.