In all likelihood, one of the happiest days in your life is the day you welcome a new child into your family. Whether through birth or adoption, this child will change your life forever.
Kiplinger advises that, amidst all the feeding, diapering and everything else a baby requires of you, you should, nevertheless, not neglect your new need for estate planning.
Regardless of your age or your perceived wealth, you and your spouse or partner each needs to create a last will and testament. These documents serve not only to pass on your assets at your respective deaths, but also to name the person or people whom you want as the guardian or guardians of your child in the event both of you die before he or she becomes an adult.
No state allows a minor to own property in his or her name. Consequently, you need to add a trust to your estate plan that names your child as the beneficiary and you and your spouse or partner as joint trustees. You also need to name someone you trust implicitly, such as the person you named as guardian in your wills, as the successor trustee. This way, if the worst happens and you and your spouse or partner die together before your child reaches the age of 21, the guardian/trustee can step into your shoes and continue to raise your child in a loving and financially responsible manner.
The easiest way to fund this trust if you currently have limited assets is to take out life insurance policies on both of your lives that names the trust as the beneficiary.