Preparing for a baby comes with a long list of things to do. You may be setting up the nursery, choosing a pediatrician, arranging childcare, reviewing health insurance, and making sure you have everything you need for those first few weeks at home.
One important item that is easy to overlook is estate planning.
Estate planning for new parents is about much more than deciding who receives your property someday. The right legal documents can help protect your child, identify the people you trust to make important decisions, and provide instructions for managing assets for your child if something happens to you.
If you are expecting a baby or recently became a parent, here are some of the estate planning decisions Connecticut families should consider.
Related Article: Estate Planning for Couples Who Aren’t Married
1. Create or Update Your Will
A Last Will and Testament is especially important once you have minor children.
Your Will allows you to state who you would like to serve as guardian for your child if neither parent is able to care for them. Without a plan in place, a court may ultimately have to determine who should serve.
Choosing a guardian can be one of the hardest estate planning decisions for parents, but it is also one of the most important.
When considering potential guardians, think about:
- Their relationship with your child
- Their age and health
- Their parenting style and values
- Where they live
- Their existing family responsibilities
- Whether they are willing and able to take on the responsibility
It is also wise to name at least one alternate in case your first choice cannot serve when the time comes.
Your Will can also nominate the person who will serve as executor and manage the administration of your estate.
Related Article: 3 Tips For Creating a Children’s Trust
2. Decide How Your Child Would Receive an Inheritance
Leaving money directly to a young child can create complications.
Minor children generally cannot simply take control of inherited property themselves. Parents can use their estate plan to establish how assets should be managed for their children and who should be responsible for managing them.
A trust may allow you to provide much more detailed instructions.
For example, you may want funds available for your child’s:
- Education
- Healthcare
- Housing
- General support
- First home
- Other important expenses
You can also decide when your child should receive control of inherited assets rather than having everything distributed at once at a particular age.
An estate planning attorney can help determine whether creating a trust makes sense based on your family, assets, goals, and the age of your children.
3. Choose a Trustee
If your estate plan includes a trust for your child, you will need to select a trustee.
The trustee is responsible for managing the trust assets and making distributions according to the instructions contained in the trust.
The person who would raise your child does not necessarily have to be the same person who manages your child’s inheritance.
For some families, having one person serve in both roles makes sense. Other parents prefer to divide those responsibilities.
When selecting a trustee, consider someone who is responsible, trustworthy, organized, and capable of managing financial matters over an extended period.
Related Article: How to Appoint a Legal Guardian for Your Minor Child in CT
4. Review Your Beneficiary Designations
Your Will is only one part of your estate plan.
Certain assets can pass according to a beneficiary designation, including many:
- Life insurance policies
- Retirement accounts
- Investment accounts
- Bank accounts with beneficiary designations
Be careful about naming a minor child directly as a beneficiary without first discussing the consequences with an estate planning attorney.
Depending on your estate plan, it may be more appropriate for certain assets to pass to a trust established for your child’s benefit.
This is also a good time to make sure your existing beneficiary designations still reflect your wishes.
5. Consider Life Insurance
Becoming a parent is also a good reason to review your life insurance coverage.
Consider what your family would need financially if one or both parents died unexpectedly.
That might include:
- Mortgage or housing expenses
- Childcare
- Everyday living expenses
- Healthcare
- Education
- Paying off debt
- Future financial support
Life insurance and estate planning often work together. How the policy’s beneficiary is designated can be just as important as the amount of coverage.
Related Article: Who Has The Legal Power To Make Decisions For You?
6. Create a Power of Attorney
Estate planning is not only about what happens after death. New parents should also prepare for the possibility of temporary or long-term incapacity.
A Power of Attorney allows you to authorize someone you trust to handle certain financial and legal matters on your behalf.
Depending on the authority provided in the document, your agent may be able to address matters involving your finances, property, bills, accounts, or other legal affairs if you are unable to handle them yourself.
Without appropriate planning, your family may face additional legal steps to obtain authority to manage your affairs.
7. Complete Your Advance Healthcare Directive
An Advance Healthcare Directive is another important part of planning for incapacity.
These documents allow you to express your healthcare wishes and designate someone you trust to make healthcare decisions if you cannot communicate or make those decisions yourself.
Pregnancy and childbirth are usually joyful experiences, but medical emergencies can happen. Having appropriate documents in place means you have already considered who should speak for you if you cannot speak for yourself.
Both parents should consider having appropriate healthcare and financial documents in place.
Should You Complete Your Estate Plan Before the Baby Is Born?
You do not necessarily have to wait until your child arrives to start estate planning.
In fact, pregnancy can be an excellent time to meet with an estate planning attorney, discuss guardianship, review your finances and beneficiary designations, and make sure you and your partner have appropriate incapacity documents.
Once the baby arrives, your schedule is unlikely to get any less complicated.
If you already have an estate plan, the birth or adoption of a child is an important reason to have it reviewed.
Related Article: Estate Planning In Your 20’s & 30’s
What If You Are Not Married?
Estate planning can be particularly important for unmarried parents.
Marriage provides spouses with certain legal rights that unmarried partners may not automatically have. If you are raising a child together but are not married, do not assume your partner will automatically have all of the financial, inheritance, or decision-making authority you would want them to have.
An estate planning attorney can help you create documents that better reflect your family and your wishes.
Estate Planning Checklist for New and Expecting Parents
As you prepare for your growing family, consider adding these items to your list:
- Create or update your Last Will and Testament
- Nominate a guardian and alternate guardian for minor children
- Decide how an inheritance should be managed for your child
- Determine whether a trust is appropriate
- Select appropriate trustees
- Review life insurance
- Review retirement account and other beneficiary designations
- Complete or update Powers of Attorney
- Complete or update Advance Healthcare Directives
- Review your estate plan after your child is born or adopted
Estate Planning for Connecticut Parents
Having a child changes your priorities, responsibilities, and often your financial picture. Your estate plan should change with them.
You cannot plan for every situation your family may encounter, but you can decide who you trust, how you want your child protected, and how important financial and healthcare decisions should be handled.
At RWC, LLC, Attorneys and Counselors at Law, our Connecticut estate planning attorneys help individuals and families create estate plans tailored to their circumstances and goals.
Whether you are expecting your first child, recently welcomed a baby, adopted a child, or need to update an older estate plan, this is an important time to make sure your legal documents grow along with your family.
Contact Reed Wilson Case to schedule an estate planning consultation and discuss the legal documents that may be appropriate for your family.
Disclaimer: The information provided in this article does not, and is not intended to, constitute legal advice and is for general informational purposes only.
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Marketing & Technology Director at RWC, LLC, Attorneys & Counselors at Law
Ukraine born and Israel / Miami, FL raised. University of Miami graduate in the Marketing field.
Mom to a girl, a boy, and a Siberian Husky.
