So, you're having a baby.
Was it planned or a surprise? Is it your first or your last? Are you having a girl or a boy? No matter what, I can tell you one thing. You're having a responsibility.
I know you know that. I know you're reading or have already read all of the latest parenting books and mommy blogs (or avoiding them like the plague). I know you're getting bombarded with advice from well-meaning friends and family. And I know, in addition to all of that external noise, you've got your own excitement, anxiety, hope, and fear to sort out. I know because I've been there. In fact, Laurel and I just recently introduced our third child into the world. We're currently caught up in all of the drama and sleeplessness and humor and wonder of life with a newborn. So we get it.
In this blog post, I'm not offering parenting advice or paranoia or guilt. My goal is to encourage you to take care of some basic planning, especially now that a new baby is on the way (or has already arrived).
So, with a baby in the picture, what types of planning do you need to have in place?
01/Guardians for your kids
You need to talk with your partner about who you would want to take custody of your children in the case of your disability or death.
Is this is a fun conversation? Nope. Is this often times a contentious conversation? Yep. Does that mean you should avoid it? Don't even think about it.
If it's hard for YOU to make this decision, just imagine how difficult it will be for your loved ones to sort it out if something were to happen to you! Make it easier on your friends and family - not to mention your children - by deciding this critical issue ahead of time.
What you'll need:
A Durable Power of Attorney with guardianship provisions in case of your disability.
A Will with guardianship provisions in case of your death.
A Nomination of Temporary Guardian in case your preferred guardians are not immediately available, but someone needs to make medical, educational, or other important decisions for your children in the short term.
02/Money for your kids
You've got assets - maybe a lot, maybe a little. Checking and savings accounts? Life insurance? Retirement? A house? You've got SOMEthing, and that SOMEthing is going to need to be used for your children's benefit.
The question is: HOW? HOW will you ensure that your assets - whatever they are - are protected so that they can only be used for your kids, are out of the reach of creditors or financial predators, and are preserved to be able to help with their college tuition, or medical expenses, or wedding, or all of the things that you would help with if you were around?
What you'll need:
The most protection you can provide, practically, is to create a Revocable Living Trust to own your assets now and to protect them for your children if something happens to you.
The next best thing would be to create a Will that includes a Testamentary Trust for your children. In order for this type of trust to be created, unlike the Revocable Living Trust mentioned above, your assets will have to go through probate first, which costs money and takes time.
Either way, you'll want to work with your financial adviser or estate planning attorney to make sure that your assets are properly titled and all beneficiary forms are up-to-date.
If you have questions about this type of planning or want more information about what this would look like for your family, schedule a free appointment with us to walk through the details.