Your relatives never thought this would happen, and, sometimes, neither did you. You became a father in your late 40s. The joy of parenthood overcomes you, but you also realize the near-endless responsibilities that come with it.
One of the most important responsibilities is preparing an estate plan and making sure to provide for your child’s financial needs if something happens to you. As more and more people put off parenthood until later in life, they find themselves having to address a number of issues that were just waiting for them. Now, it is time to act.
Update the will, name a guardian
As a late-in-life parent, you must reorganize your financial life pertaining to your estate. Here are a few things to consider:
- If you already have a will, update it. This is one of those life events that require you to review an estate plan and update your will. If you do not, you may complicate the financial life of your child.
- In your will, make sure to name a legal guardian for your child. You want the right person in this role; someone who shares the same values as you and has the financial capabilities to take on your child.
- Make sure to create a testamentary trust within the will. A trustee oversees the assets and provides money to the child when he or she needs it. Through this trust, you also determine the age when your adult child receives the assets outright. Such a decision represents a safeguard in preventing your child from making poor financial decisions.
- Obtain a life insurance policy. Granted, you will be paying a lot more in monthly premiums due to your age, but it is a good idea to have this safety net in place in case you die. Make sure to name your child as the beneficiary of the policy.
- Continue to make contributions to your retirement funds, including IRAs and 401(k)s. Also, name your children as beneficiaries. Such designations for retirement plans and life insurance policies override any choices in your will.
- As soon as you can, set up a 529 plan for your child’s college costs and make regular contributions.
You are ready for parenthood and the responsibilities that come with it. Enjoy the experience and give extra attention to your estate plan and finances. Your child will be grateful.