Estate Planning When Expecting: A Guide for New Parents

Adding a child to the family—whether that be from having a baby, adopting a child, or gaining a stepchild—is an incredibly exciting time in your life. There’s so much to think about. Scheduling birthing classes, planning the new nursery, picking out the right car seat, baby-proofing the house, and choosing your baby’s health care provider are just a few of the things on your mind. One important item that might not be on your list but should be is that new parents need an estate plan.

We understand that the desire to protect your child from harm is immense. The problem is that life is inherently unpredictable. You can never truly know what unexpected events might occur that will affect your child in life. It’s not something anyone wants to think about, but wouldn’t it be best to put a plan in place just in case? Estate planning is about protecting the people you love and doing the best you can to make sure they will be taken care of, no matter what happens or when it happens.

Do the people closest to you know what to do if something happens to you?

There’s no point in having an outdated Will, or worse, no Will at all. Because let’s face it: children pretty much change everything, and if the worst should happen to you and your partner, you want to make sure your children’s future is secure. By creating a Will now, you can help you make sure your child is cared for in the event that you pass away unexpectedly—meaning your child has a legal guardian and sufficient funds—and that your estate passes on to the right person.

Estate planning is at least as important as car seats and bike helmets for the safety of your children. You do not want to put off creating a Will, only to have it be too late due to an unexpected tragic accident.

Here are some important reasons new parents need an estate plan:

Protecting Your New Family

Who Will Take Care of Your Child After You Are Gone?

When you’re pregnant, the last thing you want to think about is the idea that you won’t be around to raise your child, but it’s important to consider what would happen to your child should the unthinkable happen.

Specifically, if something happens to you and your spouse/partner, who will raise your child? When creating your Will with your child in mind, it is important to begin considering who you want to retain guardianship of your child to ensure that your child will always be taken care of by the people you want, in the way you want, no matter what happens.

The best way to guarantee that your child is raised by someone who shares your values or beliefs and understands what you would want for your child is to name a specific person as guardian in your Will. Spend the time during your pregnancy thinking about who you’d want to raise your child if you’re unable, then ask that person if they’d be comfortable accepting the position. We understand that it can be a daunting and emotional conversation, but deciding on a guardian for your child is one of the most important tasks you’ll ever do. There are a lot of things to consider, for example:

Does the location of the potential guardian allow your child to stay close or at least connected to their family, friends, school and activities or would your child have to make major changes in those areas?
Will the lifestyle of this person make it possible for them to parent your child the way you want?
Does the guardian have the physical ability and energy to care for your child?
Does the guardian have the ability to emotionally support your child through an extremely difficult time?
Do the religious and moral beliefs and political leanings of the guardian line up with those of your family?
Do the age and health of the person make it feasible for them to parent your child? (Tip: elderly parents may not be the ideal choice)
Does the potential guardian have a parenting style you believe would work for your child? Are you comfortable with their views on education and discipline?
Is the potential guardian someone with whom your child already feels comfortable?
If the potential guardian has other children, how would your child fit in?
If the person is married, are you comfortable with their spouse also raising your child?
Does the guardian have any legal reasons why they can’t take on your child?

Once you’ve determined who you want to be the guardian and they’ve accepted the position, you must legally document your wishes. We cannot stress enough how critically important it is for expecting parents to designate guardians in their Will.

Parents who delay naming a guardian or choosing an executor usually do so because they are deadlocked over the decision—they cannot agree on that “perfect” choice. Get comfortable with the fact that there is no perfect choice. You can always amend your choice if you change your mind. However, if you don’t choose a guardian, and you pass away or are unable to care for your child, the court will appoint a guardian for you and the choice could be someone who you would never want to raise your child. Oftentimes, they’ll start by considering family members, but do you really want a judge to determine who will care for your new baby or appoint someone that you disapprove of? This can cause your child additional trauma when they’re already going through a trying time.

It is important to remember that even if you already have children with potential guardians named, you still need to name a guardian for your new child.

Naming Beneficiaries: Is Your Child Financially Secure?

Many parents of minor children become confused as to how to leave assets to their children in a Will—after all, it’s not like a toddler can exactly be a homeowner. The best option is for the money and assets to be put in a trust for the benefit of your minor child. You name your child as the beneficiary and name a “guardian of the estate”, also known as a trustee, who will distribute and manage the trust. This option gives you more control over how much and when your child receives portions of the assets. For example, you could decide that once your child is a young adult, you want to give a certain percentage of assets to them at specific ages or when they meet certain milestones such as a college graduation or marriage.

If your stepchildren or adopted children are a bit older, you may want to start thinking about what items in your home mean the most to each of your children and consider leaving that item to them in your Will. For example, is there a specific necklace that one of your children has become attached to and hopes to one day inherit? It may be important to you to make sure they receive that item when you pass away, and the best way to ensure this is to put it in your Will. No matter how big or small your estate, naming beneficiaries for assets can eliminate pain, confusion and grief.

Planning for an Accident or Illness

Who would pay the bills if you become unable to make financial decisions, even for a short period of time? By creating a financial power of attorney, you’ll name someone who can act on your behalf in regard to your financial or legal matters. This way, if you become incapacitated your rent or mortgage could still be paid and other regular expenses for caring for your child could also be covered.

Before an unforeseen situation presents itself, make sure your estate plan includes an updated healthcare proxy, also referred to as a living will or representation agreement. A healthcare proxy outlines how you want your family to proceed should an emergency take place and who would make medical decisions for you if you were unable to make those choices for yourself. If a medical emergency does happen, having your wishes documented will make an already high-stress situation easier to manage. This gives you peace of mind that you’ll receive necessary care and prevents potential conflict among family members that could be stressful to your child.

How Do You Provide for Unborn Children? What if Another Child is Born After Your Establish Your Estate Plan?

In terms of how an estate plan can provide for unborn or “after-born” children, there are a few drafting techniques that can address this issue. For example, your Will would typically refer to your current children by name and their date of birth. However, when making a Will it is not necessary to specifically name the people whom you would like to inherit your estate. For example, your Will can be drafted in such a way so as to make provision for groups of persons to inherit your estate in the event that you die.

In the section or article of your Will that provides how your estate and assets will be divided, you could simply indicate that your estate and assets will be divided into separate and equal shares for each of “my surviving children”. That would mean that whatever children you have at the time of your death—including any children born to you, or adopted by you, after the date you sign your Will—would receive a share of your estate and thus the Will would work as you intend, even if you did not amend it after having a new child.

When including future beneficiaries in a Will it is important that their identity is clear. The description “my surviving children” is sufficiently clear to be understood who is intended to benefit from a Will. Descriptions which are vague or unclear like “my favourite children” should be avoided as a bequest made to such a group of persons will probably be deemed void by the court.

Estate planning may be difficult to think about, but it is an essential step for every new parent. Above all, it is about ensuring that your child is cared for, your wishes are honored, and your legacy is preserved, no matter what the future holds.

We understand the unique challenges and concerns that come with parenthood, and we’re here to ensure that your estate plan reflects your deepest wishes and aspirations for your loved ones. By using an online estate planning tool like Legal Wills, you can create digital estate planning documents entirely online and make amendments to your existing estate plan as your family changes. This can help ease your worries with the certainty that you have a comprehensive plan in place even if something unexpected happens up the road.