Older parents are becoming more common, driven in part by changing cultural norms and surrogacy.
Comedian and author Steve Martin had his first child at age 67. Singer Billy Joel, age 68, recently welcomed his third child and Janet Jackson had a child at age 50.
But later-in-life parents have some special estate planning and retirement considerations.
The first consideration is to make sure you have a comprehensive estate plan and make sure it is kept up to date. If you have minor children, one of the most important functions of an estate plan is to name a guardian for your children in your will. This is imperative for a parent having children late in life. If you fail to name someone to act as guardian, the court will appoint one. Since the court doesn’t know your children like you do, the person selected may not be ideal.
In addition to naming a guardian, you may also want to set up a trust for your children so that your assets are set aside for them when they get older. If the child is from a second marriage, a trust may be particularly important. A trust can give your spouse rights, but also allow someone else — the trustee — the power to manage the property and protect it for the next generation.
If you have older children, a trust could, for example, provide for a younger child’s college education and then divide the remaining amount among all the children.
Another consideration is retirement savings. Financial advisors generally recommend prioritizing saving for your own retirement over saving for college because students have the ability to borrow money for college while it is tougher to borrow for retirement.
One advantage of being an older parent is that you may be more financially stable, making it easier to save for both. Also, if you are retired when your children go to college, they may qualify for more financial aid. Older parents should make sure they have a high level of life insurance and extend term policies to last through the college years.
When to take Social Security is another consideration for later-in-life parents. Under certain circumstances, children can receive Social Security benefits based on a parent’s work record if the parent is receiving benefits too. You will need to consider whether the child’s benefit makes it worth it to collect benefits early rather than wait to collect at your full retirement age or at age 70.
As you can see, there are several issues to consider. To find out the best options for your circumstances, you should consult with an estate planning attorney.
