As the holiday season is coming to a close, people often make New Year’s resolutions. They resolve to eat healthier, read more books, or, heaven forbid, spend less time on social media. Often these resolutions fall by the wayside a few months later, not to be considered again until the following January rolls around. These types of resolutions require a consistent and concerted effort to achieve the desired goal.
On the other hand, a relatively painless and rewarding resolution is to create or update your estate plan.
The birth of a child is one of many life events an estate plan is designed to manage. If you have recently had a child or are planning on having children in the New Year, you should consider who to nominate as your child’s guardian. In the unfortunate event that both parents were to pass away, the guardian is the person who will likely take a young child into their home and raise as part of their family. If the child is older, the guardian will make appropriate living arrangements for them, whether that is with the guardian, another family member, or a family friend. By nominating a guardian in their wills, the parents are afforded the opportunity choose who will make decisions for raising their child. If no guardian is nominated in the parents’ wills, state law sets out a default list of the people who have priority to take care of the child. The default person is usually a close family member, but it may not be the family member the parents would have chosen.
An estate plan is also designed to manage your own incapacitation. If you are not physically or mentally capable of making decisions concerning the management of your health care or day-to-day affairs, someone else will need to. You can appoint a person or persons you trust by executing a Health Care Power of Attorney to manage your health care, and a durable, Financial Power of Attorney to manage your finances. By executing these documents, you have opportunity to choose who will make health care and financial decisions on your behalf. If you do not have these documents in place a guardian or conservator will be appointed to make these decisions on your behalf. By default, state law sets out a list of what individuals have priority to fill these roles, and the court will appoint a guardian or conservator based on this list. However, it may not be the family member you would have chosen if you were still able to decide. Moreover, the court process can be long and expensive.
As you begin the New Year, you will gain peace of mind by creating or updating your estate plan. You will be able to check this off of your New Year’s resolution list, which may provide you with the momentum to stick to those other resolutions.