Estate planning is not just about making sure your assets are distributed how you want after you die, although that is certainly part of it. It’s also about giving yourself and your family peace of mind and protection in the event that something happens to you while your children are still young. If you, unfortunately, pass without having an estate plan in place, Indiana law would dictate how your assets would be divided and who would care for your children—which may not be what you want.
The first and most important step in estate planning as a new parent in Indiana is creating a will. This document outlines your wishes for how you want your assets divided after you die and also names the person that’ll take care of your children until they come of age (guardian). Moreover, a will lets you name a person who will be responsible for making sure your wishes are carried out and that all of your affairs are in order after you are gone (executor).
Your children are probably too young to understand how money works, let alone be responsible for managing everything you leave behind. If you were to die without an estate plan, they would likely receive their inheritance all at once when they turn 18. This could lead to them blowing through the money quickly or making poor investment choices.
Instead, you can set up a trust to manage the inheritance on their behalf until they reach a certain age, like 21 or 25. You can also stipulate in the trust how and when they will receive the money so that it is dispersed in a way that benefits them most.
Update beneficiaries on your financial accounts
It’s also essential to ensure that your beneficiaries are up-to-date on all your financial accounts. This includes your retirement accounts, life insurance policy and any investments you may have. If you don’t update your beneficiaries, the account will likely go to your spouse or other people you named when creating them.
Estate planning is an important step for all new parents, regardless of your age or the size of your estate. By taking the time to put a plan in place now, you can rest assured that your children will be taken care of no matter what happens.