Estate planning moves any late-in-life parent should consider

On Behalf of | Sep 22, 2021 | Estate Planning

You feel blessed and lucky with the birth of your daughter. You almost never expected this day would ever arrive, especially at your age. You are in your late 40s and know that you will have to live a long, long time to experience the many milestones in your daughter’s life as she grows up.

And along with trying to live a healthy life to ensure that scenario, you also must understand that you should create an effective estate plan that covers many of her financial needs, especially if you die when she is young. You would be surprised at the number of late-in-life fathers and mothers in society today, and you are among them.

Guardian, will, trust and 529 plan

Ideally, you should have had an estate plan created already. If not, this is the time to get one. Having a will or a trust remain solid choices with an estate plan as you attempt to build a significant amount of assets for your child.

Here are some of the financial options to consider for late-in-life parents:

  • Name a legal guardian for your child in your will. This is a crucial thing to do as you want a safety net in place in case you die before your child turns 18. That selected guardian may be the child’s other parent or trusted friends and relatives.
  • Set up a trust. Overseen by a trustee, the trust will ensure that your child does not inherit every asset before she turns 18. That trustee should be reliable. And it is a good idea to name someone who is not the guardian to serve as trustee.
  • When assembling a will, you also can create a trust within the will. Such a tool is known as a testamentary trust. The trustee provides the money to your child as she needs it. You can even decide at what age your child will inherit these assets. Such a move may prevent her from making financial mistakes as a young adult.
  • Ensure that your children are the beneficiaries of your life insurance policies and retirement plans. Understand that the beneficiary designations named for traditional and Roth IRAs, 401(k)s and life insurance policies override any decision made in a will.
  • Keep making investments in your retirement plans. Not only will you have a better financial foundation as you age, but your child will also thank you, too, because she likely will not have to provide you with financial support if you become disabled.
  • Ideally, soon after your child is born, set up a 529 plan, which provides funds for your child’s college costs. Make regular investments in it, too.

As a late-in-life parent, you may occasionally be mistaken as your child’s grandparent. Just smile, knowing that you enjoy your delayed parenthood and that you have the beginnings of a solid financial foundation for your family.