As a young parent, you may not feel you have amassed enough of a legacy to warrant creating an estate plan. You may be remiss not to have one, though. While everyone may benefit from having an estate plan, the stakes become even higher once you have a son or daughter for whom you must provide.
Some young people avoid making estate plans because they fear the process is too daunting. However, many aspects of the estate planning process are simple. Even a relatively basic estate plan offers notable benefits, so consider taking the following three steps when creating yours.
1. Make a will
If you do not have a will, making one after you have a child helps ensure that your child takes ownership of the assets you want him or her to have. You may also use your will to make another critical decision: who you want to serve as guardian over your child if you become unable to care for him or her yourself.
2. Purchase life insurance
Life insurance policies give your child (or another named beneficiary) a certain sum if you die and become unable to care or provide for him or her any longer. Life insurance premiums are relatively affordable and may give your whole family peace of mind should something unanticipated occur.
3. Update beneficiary designations
Once you have a child, you may want to make that child a beneficiary of certain assets. If you already have life insurance, you may want to update the beneficiary on it. If you have a retirement account, you may also want to revisit its beneficiary designations once you have a son or daughter.
Even a simple estate plan helps you plan for the future and make important provisions for your child. So, consider taking these and other steps to protect your child, regardless of what the future holds.