Welcoming a new baby is one of the most exciting and life-changing moments for Michigan parents. Along with the joy and responsibility of raising a child comes the need to plan for their future.
Estate planning is an important step that ensures your child will be cared for financially and legally, no matter what happens. Unfortunately, many new parents overlook critical details or postpone creating a plan altogether.
Below, our Plymouth attorneys at Steslicki & Ghannam, PLC, list the top five estate planning mistakes Michigan parents often make after having a baby, and why avoiding them can protect your family.
Mistake #1: Putting Off Creating a Will
Many new parents assume they have plenty of time to prepare a will. However, life is unpredictable, and postponing this essential step can leave your child without clear guidance or legal protection if something happens to you. A will allows you to name a guardian for your child and outline how your assets should be distributed.
Without one, Michigan courts will make these decisions, which may not reflect your wishes.
Mistake #2: Not Naming a Guardian for Your Child
Choosing a guardian is one of the most important reasons for estate planning after having a baby. Parents sometimes assume a family member will step in, but without a legal designation, the court will decide who raises your child. This can create conflict among relatives and uncertainty during an already difficult time. Naming a guardian in your estate plan ensures your child is raised by someone you trust and who shares your values.
Mistake #3: Failing to Update Beneficiary Designations
When you welcome a new child, it is essential to review the beneficiary designations on your life insurance policies, retirement accounts, and other financial assets. Many parents forget to update these documents, which means the wrong individuals may inherit your assets. In Michigan, beneficiary designations often take priority over instructions in a will, so ensuring they reflect your current wishes is a key part of protecting your child’s financial future.
Mistake #4: Overlooking a Trust for Minor Children
Leaving assets directly to a child under the age of 18 can create complications. Without a trust, the court may appoint someone to manage the money until the child becomes an adult, which can limit your control over how the funds are used. Establishing a trust allows you to specify how and when your child can access their inheritance. For example, you might want the funds used for education expenses or distributed gradually to support financial responsibility.
Mistake #5: Ignoring the Importance of Incapacity Planning
Estate planning is not only about what happens after you pass away. It also includes planning for the possibility of becoming unable to make decisions for yourself. Without documents like a durable power of attorney and a healthcare directive, your family may face complex legal hurdles to manage your affairs. Putting these protections in place ensures your child’s needs are met even if you are temporarily or permanently incapacitated.
Protecting Your Growing Family With the Right Plan
Every Michigan parent wants to know their child will be cared for no matter what the future holds. Avoiding these common estate planning mistakes can give you peace of mind and protect your family’s well-being.
At Steslicki & Ghannam, PLC, our Plymouth estate planning attorneys help parents in Wayne County and throughout Michigan create customized plans that fit their unique needs. If you recently welcomed a baby, now is the perfect time to ensure your estate plan reflects your growing family.
Contact us today to schedule a consultation and take the first step toward securing your child’s future.
