Be prepared. Have you planned for your child’s future if the worst should happen?
When you’re preparing to be a parent, your thoughts and dreams start to focus on your new baby.
Lovely as it is to imagine their future, not many of us stop to think what might happen if we were unable to support them – or if we weren’t around.
Whether it’s starting a savings fund or making a Will, you can make positive choices for their future security.
Making a Will
You need to make a Will to decide how you will share your estate out among your dependents. If you don’t and your Estate is above a certain value, the Government may make those decisions for you. A Will also ensures you can name one or more executors, whom you have chosen to carry out your wishes. You can also choose if you want specific people to have certain items.
Crucial too is to think about about how your assets will support your child and you should also consider who you would want to have the care of your child should you and your partner die.
If you die intestate, the Courts will appoint Guardians for your children – and they may not be the people you would have personally chosen.
If you and your partner are not married, they may have no legal entitlement on your estate unless you make provision for them in your will. James Beresford from Slater and Gordon Lawyers says that: “there is a common misconception that your ‘common law partner’ will authomatically inherit all of your estate, this is simply not correct”.
Though it’s possible to write a Will using a pre-printed form, this is one area where it pays to have expert advice. Mistakes can mean that your wishes are interpreted in a way you wouldn’t want. If your estate is complex, a Solicitor can
best advise on how to make the most of it. They can also store the Will for you and make changes when you need them.
It’s especially important to take the correct advice if you are not married to your partner, were married previously, have children from a former relationship, don’t live permanently in the UK, have investments overseas or own your own business. You need to update your will
if you marry, separate or divorce, have another child, or move house.
SAVINGS
You can start a child’s savings account when they are born. This can be a handy fund for their future.
A Junior ISA is a great idea if your child will have signi cant savings at
18 years, as it will convert to a full ISA with tax free interest. When choosing a savings account for pocket money, look for a great rate of interest, not a cute toy on joining! Your child can earn up to £17,000 per year in interest without paying tax. However, if a parent pays money in that earns more than £100 per year, this is taxed as if it is the parent’s income. Money Saving Expert has some great tips, as does Which?