The hospital bag is packed, the nursery is in order, and you've even opened a savings account for your newest addition. But have you planned for everything? Here is a planning checklist to secure your child's future.
A will allows you to decide how your assets will be distributed; more importantly, a will also allows parents to name a guardian who will care for their minor children in the event that both parents are unable. Describe funeral wishes in a separate document and leave it with a trusted friend or relative.
- Take Inventory of Your Assets
List each asset's value, account numbers, and contact information. Keep this information in a secure place such as a safe deposit box or ask your lawyer to keep it. Include the following:
- Checking Accounts
- Savings Accounts
- Life Insurance Policies
- Money Market Accounts
- IRAs and 401ks
- Pension and Retirement Plans
- Profit-Sharing Plans
- Business Interests
- Other personal property or investments
Add an Inventory of Debts as well, including:
- Credit Cards
- Student Loans
- Other Loans
- Decide how Assets will be Distributed
Whether it's millions of dollars in investments or just your great-grandmother's handmade lace napkins, deciding who gets what will eliminate misunderstandings and ensure your assets go to the right person or charity.
- Update Insurance Policies
The person listed in your insurance policy as the beneficiary will inherit those assets even if your will states otherwise. Make sure these documents remain updated, especially after a marriage or divorce.
It is your executor's responsibility to settle your estate--pay your debts and distribute your assets--in accordance with your will. Depending on how complicated a matter this is, you could choose a relative or hire a professional executor, who would carry the benefit of impartiality.
- Tell someone where to find Important Documents
Important documents include: birth, marriage, and death certificates, financial records and insurance policies. If they are not all in one place, make a list outlining where to find them. On your list, also provide contact information of your accountant, attorney, and any other advisors.
- Plan to Reduce Taxation of your Estate
There are laws dictating the taxation of your estate and gifting from it. Work with a financial planner or accountant so that this taxation is reduced.
A living will, or advance healthcare directive, communicates your preferences of medical procedures if you are unable to express them yourself.
- Draw up a Power of Attorney
This gives a trusted individual the ability to handle your financial affairs if you are unable to handle them yourself.
Although there are computer programs for drafting wills and other legal documents inexpensively, mistakes could cost a bundle in the end. An attorney, CPA or other professional can help plan for the unthinkable and maximize your legacy for your children.
BabyFit.com urges you to get financial advice from a qualified expert. This checklist and BabyFit.com (as we are not financial experts) should not be construed as giving legal or financial advice.