You always wanted to be a parent, and now you are. But you find yourself in that select group of adults who are late-in-life parents. Regardless, you feel lucky and blessed.
With humor, you cast aside comments from people who insist that you must be your child’s grandparent. But such comments along with some self-examination make you realize that you face challenges the typical parent may not. One of those challenges deals with estate planning.
Update will, create a trust and purchase life insurance
Among the important estate planning steps to consider include:
- Updating your will: The birth of a child – an important life event — represents one of the times to change your will. Neglecting to do so may cause undue complications for your family and estate.
- Have a legal guardian named: This is important for any parent with a minor child. Do your research in finding the right person or couple to be the child’s legal guardian. Make sure the person is willing, able, financially responsible and can provide emotional stability for your child.
- Include a testamentary trust within your will: Such a trust is implemented the moment you die. A trustee manages the estate’s assets and provides amounts to your child as needed. This trust may be in place until the child reaches a certain age such as 35. A testamentary trust prevents your child from making poor financial decisions or being influenced by others into making monetary mistakes.
- Consider a trust: A variety of trusts exist. They may include living, revocable and irrevocable trusts. The above-mentioned testamentary trust is an irrevocable trust.
- Buy a life insurance policy: You may face frustration here because as an older parent expect monthly premiums that are more costly than if you were a younger parent. Review options. For example, your employer may offer a more affordable life insurance policy.
- Do not neglect your retirement savings: Whether you have IRAs or 401(k), 403(b) and 457 plans, make sure to continue making contributions. Also, name your child among the beneficiaries. Understand that the beneficiary designations for retirement plans as well as life insurance policies take precedence over those within a will.
- Open a 529 college savings plan: This will help pay for your child’s education costs. Make sure to open the account as soon as you can, even when your child is only days old. Also, make regular contributions.
Preparation is crucial. Consider making these steps a reality. Your family will thank you.
Extra planning protects your child and estate
You relish the chance to be a parent but understand that so many responsibilities come with this role. As a late-in-life parent, you will have to do some extra planning to protect your estate and your child.