5 ways new parents can go about estate planning
Busy parents have enough on their plates without adding estate planning, but with the joy of welcoming new family into the world, comes the responsibility to plan for the financial future of a family.
Often, creating a will is probably the first thing that comes to mind when most people think about estate planning; there’s much more to building a stable financial future. One of the hardest parts of estate planning is knowing where to start. Luckily, we’re here to help.
Consider the following steps in order to create a comprehensive estate plan for your family and your future needs.
Step 1: Organize your assets
What to consider: If the thought of going through every one of your possessions causes you to continually put off estate planning, consider breaking this step down into smaller steps to make it easier to tackle. It’s essential to go through your belongings to ensure that anything valuable or beloved gets left in your will to the appropriate people, but it’s perfectly fine to take your time doing so. For example, organize your asset organization by starting with one room in your home at a time. Set small goals for each week, or month, to help you get the whole house done within a specific timeframe.
Step 2: Consider who the guardians of your children should be
What to consider: Determining who would care for your children if something happened to you is the least fun part of estate planning, but it’s also the most necessary. Although it might be a tough decision to make, if you take time to write down your thoughts, you might be surprised at how quickly you can create a solid plan. Some factors you may want to assess when thinking about the guardian(s) for your child(ren) include their age, where they live in proximity to your family, as well as lifestyle and other emotional factors that are important to you. Keep in mind that when it comes to money, you can always set a physical guardian for your child, as well as a separate guardian for their finances.
Step 3: Take a look at all your financial accounts
What to consider: Creating your estate plan is the perfect opportunity to go through all of your financial accounts. You can update any beneficiary information as needed, perhaps by adding children as contingent beneficiaries to your spouse or significant other if you haven’t already. It also helps to check with the laws of your state to find out which document — a will or the beneficiaries listed on specific financial accounts — supersedes the other. Set a reminder to go over your financial accounts periodically and make any essential adjustments.
Step 4: Factor in health decisions
What to consider: Most people don’t think to include a durable power of attorney as a part of their estate plan, but in the case of an accident or illness that leaves you unable to make decisions, you’ll want to have this in place. A durable power of attorney should be someone you trust. They will be responsible for taking care of things like managing your investments or making medical decisions on your behalf if you can’t. While a spouse or significant other might seem like the obvious choice, you'll want to be mindful of that person's situation. Another option is appointing multiple powers of attorney, perhaps one for medical decisions and one for financial matters, for example.
Step 5: Document additional plans
What to consider: Although not a necessity, a letter of intent is a valuable addition to any comprehensive estate plan. It helps define details like what you would like to do with certain assets after your death, or the details of your funeral. It’s an easy way to outline specifics.
It may seem challenging, but finalizing a solid estate plan is an essential task. By dividing the process into small, achievable steps, it should be easier to get through everything within a reasonable timeframe — and the professionals at Voya are always available to help with advice, tools and additional resources, whenever you need them.
This information is provided by Voya for your education only. Neither Voya nor its representatives offer tax or legal advice. Please consult your tax or legal advisor before making a tax-related investment/ insurance decision.