What late-in-life parents should know about estate planning

You had always wanted to have children. Now, you have that wish, and it so happens that are in your early 50s. Some people may think that this is late for you to have children because many people your age become grandparents rather than parents.

But, to you, this was the right time for your daughter to be born. Later-in-life parents have the same concerns and jubilations as any other parent. Among those concerns include related to their health and whether they have the energy. But older parents also must take extra steps when it comes to estate planning.

Update your will, get life insurance

Here are some critical estate planning and financial steps that any late-in-life parent should take:

• Already have a will? Update it: Anytime a life change occurs, make sure to update your will. And having a child is on that list. If you do not make that change, you have left your beneficiary child out of the will, potentially leading to a slew of financial complications.
• Name a legal guardian for your child: Include this in your will. You want to have this important decision in place in case the unthinkable happens: You and your spouse die.
• Strongly consider including a testamentary trust in your will: Your minor children are named beneficiaries. and your assets get paid out only when the beneficiaries reach a certain age. Think of it as a safeguard that will prevent your children from making poor financial decisions if they receive the money all at once.
• Consider purchasing a life insurance policy: It may seem unfair, but as an older person, you can expect to pay more on monthly premiums. Look into options. For example, your employer may offer life insurance, and this may be the most affordable option. Some of these policies are “portable,” meaning if you leave your employer, you can continue to have the insurance. However, expect to pay even more because your employer is no longer covering a portion of the policy.
• Do not neglect your retirement investments: Older parents must understand the importance of continuing to make contributions to IRAs, 401(k) and 403(b) plans. You have fewer years to save for retirement, so keep investing. Along with your life insurance policy, name your children as beneficiaries of your retirement plans. These designations supersede any decisions found in your will.
• Establish a 529 college savings plan: It would be a good idea to create one soon after your child is born. Also, make regular contributions as the funds will help pay for your child’s college education.

Please consider these as the first steps to take as a parent. You and your children will be grateful.

Importance of a financial foundation

In a way, nurturing your estate plan and financial investments represent one of many ways to nurture your children. As an older parent, you see the importance of creating a financial foundation for your children.