As a new parent in Texas, you have undoubtedly experienced the joy and excitement of bringing a new life into the world. However, along with the joys of parenthood come many responsibilities, including the need for estate planning. Estate planning is for all, not just the elderly or wealthy, but for anyone providing for their loved ones in the event of death or incapacity.
Importance of creating a will
One component of estate planning for new parents is the creation of a will. A will outlines how you want your assets to be given out after your death.
It can also specify who will care for your minor children if both parents pass away. If you do not have a will, your assets will be given out according to Texas state law, which may not reflect your wishes. Moreover, without a will, the court will appoint someone to care for your minor children, which may not be your chosen person.
Consideration of a trust
In addition to a will, new parents should consider creating a trust, which is a legal arrangement. In it, a trustee manages assets for the beneficiary. Trusts can be revocable, meaning you can change the terms or terminate the trust, or irrevocable, meaning you cannot change the terms or terminate the trust.
Trusts can be an effective tool for providing for your minor children, as they can ensure that your assets are managed and distributed according to your wishes. For example, you can specify that the trust assets be used for your children’s education and healthcare.
Designating beneficiaries for retirement accounts and life insurance policies
Another important aspect of estate planning for new parents is designating beneficiaries for your retirement accounts and life insurance policies. Beneficiary designations are separate from your will and can override your will.
For example, if you name your spouse as the beneficiary of your retirement account and life insurance policy, but your will specifies that your assets should be divided equally among your children, your spouse will receive the retirement account and life insurance policy. As a new parent, you may want to consider your spouse as the primary and your children as contingent beneficiaries.
Secure your family’s future with estate planning
Estate planning is a vital aspect of responsible parenting, and new parents in Texas should take steps to protect their families.
Creating a will and trust while also designating beneficiaries for life insurance policies can ensure your wishes are performed dutifully and your loved ones are provided for in the event of death or incapacity. By planning your estate, you can take comfort in knowing you have taken care of your family.