In all the chaos of buying new clothes, constantly changing diapers and seemingly sleepless nights for months on end, you may not be thinking of establishing an estate plan. As a new parent the last thing on your radar is probably creating a will or planning your estate. But, if you don’t already have an estate plan, then this is exactly the time to do it. Because think of the ramifications should you or your spouse (or both of you) encounter an unthinkable accident that takes one of your lives at the worst possible time.
Estate planning before or right after a birth is the most responsible thing you can do as a young parent. If you are a sibling, cousin or parent to new parents, you should encourage them to get their affairs in order. If for no other reason than to give the baby a smooth financial future where any part of your assets or estate get unnecessarily taxed or locked up in a costly probate matter. When starting out as new parents, everyone is bombarded with new tons of parenting duties. Estate planning should be one of them to ensure the financial well-being of not just your baby, but your spouse as well. The following are some basic aspects to consider for your estate plan.
It’s important to find an experienced and knowledgeable professional, like our Denver estate planning attorney. They will help you move ahead with a well-tailored estate plan. It all starts with a will that names the guardian(s) for your child in the event something happens to one or both of you. By naming surrogate guardians, you take the guessing work away from the courts and empower your child for the best future possible. Remember do a thorough and thoughtful process of selecting a future guardian; one who is responsible and doesn’t have a history of depression or addiction problems.
There is always the possibility that you don’t want any family members to raise your child. Maybe you have a best friend that your child has bonded with, and they have kids that they are friends with. Chances are the court would never know your guardianship intentions, unless you made it known in your will.
Getting a life insurance policy even a basic one that you can afford would ensure that your child would get any lost earnings you would have made for several years. This would also allow your family to have access to cash in the event you unexpected died to pay for basic necessities. Also, term life insurance is a good thing for young parents to consider because it stays in effect for a designated number of years. There’s also a few online outlets that will allow you to compare rates for free among several top insurance providers.
Don’t worry about the old “trust fund baby” stereotype, it’s just a ruse because others are just jealous their parents didn’t have the foresight to set up a trust for themselves. Living Trusts are great tools for protecting your assets from others, including the government getting at them. You can set up a trust for each beneficiary you name in your will, but remember a trust is a completely separate document than the will. A trust will limit the amount of taxes beneficiaries have to pay upon your death. Setting up a living trust also saves your family money by not having to subject your family to probate court. Here is a few things you can set up in a living trust:
This is pretty straight forward. Whenever you create a 401(k), IRA or life insurance policy you’re asked to name a beneficiary. Keep in mind 401(k)s get taxed like ordinary income, so heirs won’t receive as much money as is set aside in say a savings account.
This tool would allow you to designate someone to act as your agent in the event you become incapacitated or die. This allows the person to manage your finances, pay bills, and act on your behalf in most decision making situations (except for medical power of attorney, which is a completely different tool). Often times, medical power of attorney and durable power of attorney can be designated as two different individuals. For instance, parents will sometimes put one adult child or family member in charge of the finances and another one in charge of making critical life-sustaining decisions.
The tool in this case would be to create an affidavit with the funeral arrangements and the person to oversee it of your choice. Typically it is the executor of the estate. For instance, you can specify burial or cremation. If you don’t designate this action and representative, then in Colorado the law specifies that the duty goes to a personal representative set up to takes care of the estate. Finally if that personal representative is not established it will go to next of kin. Also, you are not required to use a funeral director which could cost thousands of dollars. In fact, in Colorado you can have the body in your home, until such time as is necessary to bury or cremate it. The body must be embalmed within 24 hours if it is not buried or cremated first.
The other thing is that it is a good idea to go back and do a comprehensive estate plan review and update any information, beneficiaries, and possibly even witnesses (in the event someone has passed away) on a semi-regular, yearly basis.
Whether you’re expecting a young one shortly or your family just had a baby, it’s the ideal time to contact a Denver Estate Planning Attorney at Phillips & Blow, PC to do some comprehensive estate planning for your baby’s future. Our experienced team of professionals take pride in helping each of our clients and their families find the best solutions for them. We provide personalized attention at every step of the estate planning process, which means that our clients can rely on our Denver estate planning attorneys to always be competent, caring and professional. We also pride ourselves on providing the highest quality of estate planning legal services at affordable rates.
We can discuss your estate planning needs for your baby’s future and different options during our consultation. To schedule this meeting, call us at (303) 713-9147 or email us using the contact form at the top of this page.
From our offices in Denver, we serve clients throughout the southwest and southeast Metro Area, including (but not limited to) people in Highlands Ranch, Littleton, Castle Rock, Parker, Aurora, Greenwood Village, Englewood, Centennial, Wheat Ridge, Golden and Arvada.