Essentials of Estate Planning for New Parents in Texas

 Posted on March 25, 2024 in Estate Planning and Probate

Becoming a parent is a life-changing event that comes with numerous responsibilities, including ensuring your child’s future is secure. As a new parent in Texas, estate planning may not be at the forefront of your mind, but it is crucial to protect your family’s well-being. A Texas lawyer can discuss the essential elements of estate planning that you should consider and help you draft the proper paperwork.

Drafting a Will

A will is the foundation of any estate plan. It allows you to designate how your assets will be distributed upon your death and, most importantly, who will become your child’s guardian. In Texas, passing away without a will (intestate) means that state laws dictate the division of your assets, which might not reflect your personal wishes. By creating a will, you maintain control over your estate and ensure your child’s future is secure.

Choosing a Guardian

One of the most critical aspects of estate planning for new parents is selecting a guardian for your child. This decision should not be taken lightly, as the guardian will be responsible for raising your child if both parents pass away. In selecting a guardian, it’s important to evaluate their values, financial stability, and capacity to offer a nurturing environment. It is also crucial to have a conversation with the prospective guardian to confirm their readiness and ability to assume this significant role.

Establishing a Trust

Setting up a trust can also provide further protection for your child’s future. A trust is a legal entity that holds assets on behalf of a beneficiary, in this case, your child. Establishing a trust lets you specify how and when the assets will be distributed to your child, ensuring their financial needs are met. In Texas, there are several types of trusts available, including revocable and irrevocable trusts, each with its own benefits and drawbacks.

Updating Beneficiary Designations

Many assets, such as life insurance policies and retirement accounts, allow you to name beneficiaries who will receive the funds upon your death. It is crucial to review and update these designations after becoming a parent to ensure your child is included. Neglecting to update your beneficiary designations can result in the distribution of assets according to default provisions, potentially conflicting with your present intentions.

Appointing a Power of Attorney

A power of attorney is a legal instrument that permits you to appoint an individual to manage your financial and healthcare decisions should you become unable to do so. For new parents, it is crucial to establish a power of attorney to guarantee that your child’s needs are addressed in the event you are unable to make decisions on your own. In Texas, two primary forms of power of attorney exist: the Statutory Durable Power of Attorney for financial matters and the Medical Power of Attorney for healthcare decisions.

Reviewing and Updating Your Plan

Estate planning is not a one-time event; it is an ongoing process that should be reviewed and updated regularly, especially after significant life changes like becoming a parent. As your child grows and your financial situation evolves, it is essential to revisit your estate plan to ensure it still reflects your wishes and provides adequate protection for your family.

Contact a San Antonio, TX Estate Planning Lawyer

Estate planning is a critical step for new parents to ensure their child’s future is secure. By drafting a will, choosing a guardian, establishing a trust, updating beneficiary designations, appointing a power of attorney, and regularly reviewing your plan, you can have peace of mind knowing that your family is protected. If you are a new parent, consult with a Bexar County, TX estate planning attorney to discuss your unique situation and create a comprehensive plan tailored to your needs. Call Geoff Mayfield, Attorney at Law at 210-535-0870 to discuss your options over a free consultation with a lawyer who has 15+ years of experience.