Many people think of estate planning as something that is done by the elderly. And it certainly can be. If someone retires at 65, they may start considering the estate plan because they’re thinking about the end of their life and what that means for their family.
But that doesn’t mean you have to wait to make an estate plan. In fact, for new parents who may only be in their 20s or 30s, there are some key reasons why drafting an estate plan is important. After all, they never know exactly when they could pass away unexpectedly, so they want to make provisions for this new child.
Children may not be able to own or control assets
For example, it is possible to select a minor as a beneficiary in your estate plan. But from a legal perspective, they often can’t control or genuinely own assets until they turn 18. As such, you may want to take certain steps to guide this process. One example could simply be putting money for your minor child into a trust fund so that the trustee can either use it to help the child as they grow up or hold the money until the child turns 18 and gets access to the trust.
You may want to choose a guardian
Another thing to consider is that passing away while the child is still a minor can leave a parental void in their life. To fill this, you select a guardian. You typically want to look for someone who has similar values as you and who is willing to take on this role. You may want to consider factors like age, health, and financial position to determine who would be the optimal candidate to raise your child in your stead.
These are just a few examples of how estate planning can be beneficial at a young age, so be sure you know what legal options you have.