The Importance of Estate Planning for Expecting Parents

Becoming a parent is an exciting journey filled with dreams and plans for the future. Amidst the joy and anticipation, you also need to consider your child’s future security. While no one wants to think of it, the worst could happen to you, and you could become unable to care for your child. Without an estate plan, your assets could go through a lengthy probate process, and the court would decide on guardianship for your children. Take control of your child’s future with estate planning.

What Is Estate Planning?

Estate planning involves organizing your financial affairs to ensure that your assets are managed and distributed according to your wishes after you pass away. It includes creating a will, assigning power of attorney, and considering trusts. According to Experian, planning ahead can avoid potential legal complications and ensure that your loved ones are taken care of. Estate planning can also help minimize taxes and protect your assets from creditors.

What If You Don't Have a Will?

Without a will, state laws determine the distribution of your assets and the guardianship of your children. This could mean that your child ends up with a relative you haven't spoken to in years or foster care. An estate plan allows you to choose guardians and ensure that your child's future is secure.

What Should Be Included in an Estate Plan?

A will is the foundation of your estate plan. It should:

• Name a guardian for your children.
• Name an executor to manage your estate.
• Specify who inherits your assets.

Assigning Power of Attorney

Power of attorney allows someone to make financial and health care decisions on your behalf if you become incapacitated. This includes:

• Financial Power of Attorney: Give someone the power to manage your finances and property.
• Health Care Power of Attorney: Empower someone you trust to make medical decisions for you.

When Is the Best Time to Start Estate Planning?

The best time to start estate planning is now. Waiting until your baby arrives can lead to delays and potential financial hardships. Building an emergency fund, contributing to a health savings account, and setting up automatic savings transfers are great first steps. Proactively managing your finances can help reduce stress and ensure a smoother transition into parenthood.  Starting early also allows you to make informed decisions and adjust your plan.

Highlighting a Real-Life Story

When Joyce Marter, a financial therapist and author, was expecting her first daughter, she found herself living paycheck to paycheck with substantial student loans. In an article by the NY Post, she reflects and explains how she realized the immense value of having a solid financial plan before transitioning into parenthood. Marter recalls a conversation with her pregnant supervisor, who advised her that no one is ever truly ready for a baby: “None of us are really ever truly ready — you just take the plunge and figure it out as you go.”

Years later, as Marter prepared for her own child, she understood the importance of proactive financial planning. She began by building an emergency fund, contributing to a health savings account and avoiding unnecessary baby registry items. These steps provided a financial safety net and helped reduce stress during her pregnancy.

Key Takeaways

• Security for Your Children: Ensure that your children are cared for, and your assets are managed according to your wishes.
• Choose Guardians and Executors: Decide who will care for your children and manage your estate.
• Financial Preparedness: Build an emergency fund and contribute to health savings accounts to cover unexpected expenses.
• Professional Guidance: Consult an attorney to ensure all legal aspects of your estate plan are covered.
• Peace of Mind: Knowing that your family's future is secure brings immense comfort and reduces stress.

If you and your partner are expecting parents and would like to ensure that your child's future is protected and your wishes are honored, consider consulting an estate planning attorney or law firm. The Werner Law Firm living trust lawyers in Frisco can guide you through the intricate details of estate planning and help you make the best choices for your family's future.

If you have any questions, schedule a free appointment with us through our online appointment page.

You can also read reviews from some of the hundreds of clients we have helped over the years.

References: NY Post (Oct. 18, 2023) “Savvy expecting parents need to start financial planning now” and Experian (Oct. 13, 2020) “How to Plan Your Estate as a New Parent - Experian”