GRANDPARENTS: THIS IS SOMETHING YOU SHOULD THINK ABOUT AS WELL!
When a baby becomes part of the family, everything changes. Emotionally, practically, and financially, life is never the same after the birth of a baby. If you have just welcomed your first baby into the family, you are likely full of anticipation as well as a bit overwhelmed. In the midst of all these emotions, be sure to take the time to make four important estate planning changes that relate to the newest addition to the family.
- Revise Plans for Assets—before baby, you likely named your spouse and then a family member as beneficiaries of your assets under the terms of your Last Will and Testament. Now that baby is here, be sure to include baby as a beneficiary in all relevant documents.
- Protect Your Spouse—along with changes to your Will, you may wish to retitle some other assets to ensure that your spouse/partner has immediate access to enough funds to care for your child if you die. Assets that pass through probate can be held up for months. Retitling bank accounts and property can avoid probate altogether and make the assets available soon after your death.
- Decide on Guardians/Trustees—what happens if you and your child’s other parent both die simultaneously? Who will care for baby? Who will oversee assets and investments for baby? Start thinking about whom you trust to be your child’s guardian and/or trustee.
- Education – consider taking advantage of the tax laws that allow you to establish an educational trust free from gift taxes. If you start now, even a small yearly contribution could really add up by the time baby heads off to college and you won’t owe any gift taxes on the trust assets.