Congratulations! You are about to be a proud papa or mama! You might not normally be thinking about your death at a time like this, but it’s never too early to start planning for your inevitable demise.
Now is the time to get your estate in order by getting a legal will. Why now? Here’s why:
You need to name a guardian for your children. If something happens to you and your partner, who will take care of your children? If there is no clear directive at the time of your death, a judge will appoint a guardian.
Someone needs to handle your children’s inheritance. Even if the amount is modest, your children will likely inherit some money from you – even if it’s a life insurance policy. It’s best if you name a custodian to have a say over how and when your child gets access to that money. Most such instances are governed by the Uniform Transfer to Minors Act (UTMA). Your lawyer can help you set up such an account.
Along with financial inheritance, there’s the matter of property. If you’re going to buy a house – now or in the future – and there is no clear inheritor (a spouse or joint tenant), your child will inherit the property. Who will manage it until your child reaches maturity? Good question. You can name someone to perform this function in your will via UTMA.
The heaviest lifting in a will involves naming an executor. This person handles your affairs after you die – the large decisions and the small. If you die without a will or no clear executor, the court will handle your affairs.
Do you have special heirlooms? Multiple properties? Items you can imagine might be the source of controversy after your death? You can make sure they go to the person best suited to inherit them by stating the inheritors in the will.
And finally, by discussing a will you may decide to set up a trust fund or a living trust. A trust fund allows you to determine the age your child will get any inheritance, how much and how the funds are used. A living trust or revocable trust sets up the trust while you’re alive and lets you make changes in funds, beneficiaries and so on before you die.