Becoming a parent for the very first time is a momentous event. At once both exhilarating and frightening, anyone who has recently become a parent will likely tell you that it doesn’t take long before the realization you’re now responsible for another person’s life starts to kick in.
These emotional responsibilities have been known to keep new parents up at night (if their crying infants aren’t already doing that), particularly if they haven’t really prepared for the occasion. It’s natural to worry and every parent will want the best for their child from day one.
If you’re like most Singaporean parents, most of these worries will revolve around raising your child right, sending him or her to the right schools and keeping them out of harm’s way. However, preparing for parenthood isn’t just about making sure your child enters Nanyang Primary; it involves planning and protecting your new family financially as well.
Based on our experience, we think it’s useful to consider these five steps to ensure your new family is safe and sound in the event you pass on, or become mentally or physically incapacitated.
1. Organise and Collate Emergency Information
This is particularly useful if you intend to have a domestic helper or family member help out with your newborn. Emergency information is more than just having the neighbourhood police post and ambulance on speed dial. You should have a list of relevant doctors and important people to contact. This can and should include your closest friends and family in the event that you can’t be reached in the event of a baby emergency.
It should also include specifics about your digital and physical assets, bank accounts, lawyers and financial advisers. Doing so will save your loved ones from fumbling in the dark in the event of your death and can be useful for better decision-making.
2. Start a Savings Plan for University
Raising a child in Singapore isn’t cheap, and it’s a good idea to plan for some of their larger ticket items. One of the most fundamental big ticket items is your child’s tertiary education. Whether you intend to send your child to a local university or to a college overseas, it’s pertinent that you start planning for this eventuality now.
3. Draft a Will
This is one of the most basic ways to protect your new family. While most new parents will usually be fairly young and may consider the idea of creating a will a little morbid, it’s a good idea to plan ahead. Life is uncertain and nobody can predict what will happen the following week.
A well-drafted will for new parents will typically include clauses naming trusted family members as guardians for their children in the event something untoward happens to them. Parents may also want to consider creating a will trust to make sure their child is taken care of until they’re of suitable age to manage their own inheritance. You may want to take a look at this guide on how to draft a simple will in Singapore.
4. Create a Lasting Power of Attorney
This allows the person you designate to make legal decisions in the event you become mentally incapacitated. Without a lasting power of attorney, the courts or a third-party designated by the courts will wind up making legal decisions for you in the event of you become mentally incapacitated.
5. Start Shopping for Life Insurance
If you haven’t already purchased life insurance, becoming a parent should be an easy prompt to purchase life insurance for the first time.
Many parents will likely need a decent coverage to account for anticipated future expenses, such as university or paying off a mortgage. A stay-at-home parent should also have life insurance, because if the stay-at-home parent passes on, the working spouse would likely incur higher costs, for things like child care.
If you’re not certain about what you may require, speak to an insurance agent or financial advisor about your new needs and they will guide you accordingly.