The birth of a child is one of life’s most joyful milestones. Amid the sleepless nights, baby snuggles, and adjusting to a new routine, legal paperwork is probably the last thing on your mind. But becoming a parent changes everything, including your priorities for protecting your family.
Whether you’re welcoming your first child or adding to your growing family, creating or updating your estate plan is one of the most important steps you can take to safeguard your child’s future.
1. Naming a Guardian for Your Child
Without a legally appointed guardian, a court will decide who raises your child if something happens to you and your child’s other parent and it may not be the person you would have chosen.
An updated estate plan allows you to:
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Nominate a trusted guardian who shares your values and parenting style
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Name alternate guardians in case your first choice cannot serve
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Prevent potential family disputes over custody
2. Protecting Your Child’s Inheritance
Children cannot directly inherit and manage assets until they reach adulthood. Without planning, the court will appoint someone to manage your child’s inheritance and those funds could be distributed outright to them at age 18, ready or not.
A well-drafted revocable living trust that includes a continuing trust for your child:
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Ensures their inheritance is managed by a trusted person you choose (your trustee);
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Allows you to set the terms of distribution; and
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Can be crafted to protect assets from the future creditors, predators, lawsuits, or divorcing spouses of your child.
3. Updating Beneficiary Designations
Many new parents forget that beneficiary designations on retirement accounts, life insurance, and investment accounts can override what’s in a will or trust. After your child’s birth, it’s crucial to:
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Review and update all beneficiary forms
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Coordinate them with your estate plan to ensure consistency
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Consider naming a trust, not your minor child, as the beneficiary to avoid court intervention
4. Planning for Incapacity
Parenthood also means thinking about who will make decisions for you if you cannot. Your updated estate plan should include these additional documents:
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Durable Power of Attorney for financial matters
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Advance Health Care Directive for medical decisions
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Instructions for access to funds needed to care for your child
5. Providing for Special Circumstances
If your child has special needs, your estate plan becomes even more critical. A special needs trust can protect eligibility for government benefits while providing supplemental support for your child’s care.
6. Peace of Mind
Perhaps the most valuable benefit of updating your estate plan is the peace of mind it brings. Knowing you’ve made thoughtful decisions about your child’s care, security, and financial future allows you to focus on what matters most, enjoying time with your family.
Life changes quickly after the birth of a child, but your estate plan ensures your family is protected no matter what the future holds. If you’ve recently welcomed a new baby, now is the time to create or update your plan.
If you, a friend, or a loved one needs help establishing or updating an estate plan after the birth of a child, we’re here to help. Contact our Intake Department at 760-448-2220 or visit us online at www.geigerlawoffice.com/contact.cfm. We proudly serve families across California from our offices in Carlsbad (San Diego County) and Laguna Niguel (Orange County).