Estate Planning Tips for New Parents in Texas

 Posted on April 22,2024 in Estate Planning

Becoming a new parent is an exciting and transformative experience but comes with many new responsibilities. One of the most important things you can do as a new parent is to prioritize estate planning. Through an estate plan, you can ensure that your child’s future is secure and your wishes are carried out, even if the unexpected occurs. A Texas lawyer can help ensure your estate plan is legally bound to protect your family.

Appoint a Guardian for Your Child

One of the first steps in estate planning for new parents is appointing a guardian for your child. A guardian is a person designated to care for your child in the event that both parents pass away or are unable to do so. In selecting a guardian, it is important to evaluate aspects like their values, approach to parenting, and financial stability. In Texas, you can legally designate a guardian in your will or through a separate document called a “Declaration of Guardian.”

Setup a Texas Revocable Living Trust

A revocable living trust serves as an effective estate planning instrument, offering significant advantages to new parents. Establishing a trust and transferring assets into it allows you to dictate the management of your child’s inheritance in accordance with your preferences. In Texas, a revocable living trust allows you to maintain control over the assets while you are alive and can be modified as your circumstances change. Upon your passing, the trust becomes irrevocable, and the assets are distributed to your beneficiaries, often without the need for probate.

Protect Your Assets with Proper Beneficiary Designations

Many financial accounts and insurance policies allow you to name beneficiaries who will receive the assets upon your death. Review and update your beneficiary designations after becoming a parent to ensure your child is included. If you fail to update your beneficiary designations, the assets may be distributed according to the default provisions, which may not align with your wishes. Be sure to properly designate beneficiaries on accounts such as life insurance policies, retirement accounts, and bank accounts.

Prepare for the Unexpected with Powers of Attorney

Estate planning encompasses more than just preparation for death; it also involves planning for possible incapacity. Two main types of powers of attorney can be established: a durable power of attorney for healthcare decisions and a durable power of attorney for financial management. 

A durable power of attorney for healthcare enables you to appoint an agent to make medical decisions for you in the event of incapacitation. Likewise, a durable power of attorney for finances authorizes an individual to handle your financial matters if you cannot manage them independently.

Take Advantage of Texas-Specific Estate Planning Tools

Texas offers several unique estate planning tools that can be particularly useful for new parents. For example, the Texas Uniform Transfers to Minors Act (UTMA) allows you to create an account for your child’s benefit without a formal trust. The Texas College Savings Plan is another option that enables you to save for your child’s future education expenses while enjoying tax benefits. The Texas Homestead Exemption can help protect your family’s primary residence from creditors.

Contact a Fort Worth, TX Estate Planning Attorney

As a new parent in Texas, estate planning should be a top priority. By working with a Fort Worth, TX estate planning lawyer, you can ensure your child’s future is secure. Do not wait – start your estate planning journey today and give yourself and your family the peace of mind you deserve. Mr. Gonzalez is also a certified public accountant (CPA), which brings more awareness to the financial side of estate planning. Call Gonzalez Law, PLLC at 817-349-7330 for a free consultation.