People sometimes assume that estate planning is an activity to engage in when they retire. They may be waiting until they are in their 60s or 70s to make a plan that passes their assets on to the next generation.
But it can be risky to procrastinate estate planning, and it has some distinct benefits at younger ages. For example, here are some reasons why new parents may want to consider an estate plan, even though they may only be in their 20s or 30s.
Choosing a guardian
First and foremost, parents have to be conscious of what would happen to their children if they were to pass away unexpectedly. Who would take care of them? Where would they live? An estate plan gives these parents a chance to pick a guardian to step into that role if necessary.
Putting assets in a trust
Additionally, if the parents do pass away while the child is still a minor, then it may be necessary to put the assets into a trust that can hold them until the child turns 18. Parents may also want to use trusts to accomplish specific goals. For example, parents could set money aside to eventually pay for their child’s college tuition.
Creating stability
Overall, an estate plan is just a way for parents to make sure that their child’s life is stable and secure if anything happens to them. They know that the child’s needs will be met, that they will have close relationships and people to care for them. If there are extended family members involved, such as grandparents, then the estate plan can also define some of their rights so that there is no confusion.
Are you a new parent who doesn’t have an estate plan in place yet? You can see how important it is, so make sure you know what legal steps to take.
