With kids come new responsibilities. Some are obvious, like getting a car seat and baby proofing your home, but other new responsibilities are not as obvious. One of those responsibilities is updating your estate plan.
Guardianship
The first responsibility is making sure your kids will be safe, should you die. This is done through a guardianship designation for the person who will care for your kids, should you and your spouse die.
You should name a few back-up guardians to make sure someone you trust cares for your kids. If you neglect this important designation, your child could be left to the state for care.
Insurance
For estate planning purposes in Texas, there are two key types of insurance: life and long-term care. Life insurance is there to replace one or both parent’s incomes.
This is because very few new parents can afford to lose the other parent without a drastic drop in living conditions (or destitution). Long-term care insurance ensures that your estate is not drained because of an injury. This is often overlooked, but the cost is usually, low.
Education
Now that you have a plan to protect the estate and your child, your next move is to plan for your kid’s education. This is done through 529 plans, Uniform Gifts to Minors Act accounts or Uniform Transfers to Minors Act accounts, which can all help protect those funds from taxes.
Takeaway
The key takeaway for readers is that you need to plan, and you need to plan now. You never know what could happen or when something bad could happen, but planning for it now can ensure that, if it does, your family is protected. You can get your estate plan going by talking with an estate planning attorney.