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Do I need to update my estate plan after having kids?

On Behalf of | Jul 8, 2022 | Estate Planning |

Congratulations! Having a child is a life-affirming and life-changing event, and you are going to be a great parent. Breathe, and take it one day at a time. But, do not forget that you need to update your San Jose, California, estate plan as soon as possible.

Changing heir allocations

First, the estate plan will need to be updated because there are now more heirs. You will need to add your kids, which will likely mean changing your current bequest amounts.

Trusts

You and your spouse have likely already gotten California life insurance for your children, but your family may have as well. In addition, you both have your own life insurance policies, as well as several brokerage and bank accounts. Rather than having a piecemeal inheritance, you can have all of those funds flow into a trust for the benefit of your kids. That trust will be administered by a trustee of your choosing, and disperse funds according to your wishes.

If you do not already have a trust as part of your estate plan, you will likely need to contact a professional to have one created. And, if you already have a trust, you will need to contact your estate planning attorney to have it updated with your kids.

Guardian designation

However, the most important addition you will need to add to your estate plan is a guardian designation for your new baby. Why? Because, at some point, both you and your spouse will pass, but we never know when that will happen.

If it happens while your child is still a child, without a designation, your child will likely spend time in the California foster care system. And, if no one in you or your spouse’s family steps up to volunteer as a guardian, that is where your children will stay, likely, until they are adopted.

What does the guardian do?

Essentially, if you and your spouse pass or become incapacitated, the San Jose, California, guardian becomes the parent. They will care for your child, like your child is their own, because, legally, your child would become their child until you are no longer incapacitated. This means they will be responsible for their care and well-being.

How do I select a guardian?

Choosing a guardian is a deeply personal process in which you should include the potential guardian. Make sure the guardians you select care for your children, want to be a guardian and you agree with their parenting style and philosophy. You should designate more than one guardian, just in case something happens and your selected guardian cannot or will not take over as your child’s guardian.