Estate planning for new parents

Florida parents generally have a lot to think about when setting up their estate plans. Even if your estate plan is already solidified, it will need major edits once you become a parent. If you don’t have an estate plan in place, making one ensures that your child will be cared for should anything happen to you.

What are some of the first steps to creating an estate plan?

Estate plans can consist of many different parts, so there’s a few different ways to start your estate plan. Many people start with making a will.

A last will and testament addresses what happens to all of your current assets and properties after your death. A will also addresses who gets guardianship over your child after you’ve passed.

Usually a family member or close friend will act as guardian over your child should you pass. If you don’t name a guardian or have a will, the guardian will automatically be the closest living relative.

Consider purchasing life insurance or setting up a trust

Life insurance policies can provide your children and family members with extra cushioning to take care of the funeral arrangements, estate taxes and any other expenses that crop up. Estate taxes can be costly, which is why many people look into setting up trusts.

Trusts give you a way to pass down money and assets without extra taxes. If you put your life insurance funds into a trust, for example, the money isn’t subjected to estate taxes. This gives your trustee or beneficiaries extra room to pay estate taxes and other end-of-life expenses without taking a hit to their own finances. Setting up a trust isn’t necessary for most estate plans, but it’s a good way to avoid probate and estate taxes.

Estate plans should also be updated frequently, such as every few years, to account for changes in finances, circumstances, new family members and more. There are many different types of estate plans and assets that can benefit your family. Ultimately, what you choose will be dependent on what works for you.

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