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What to Plan When You’re Expecting

A few days ago, I got a very giddy call from a client. He told me that he needed some legal advice. When anybody calls me sounding so happy and says they need legal advice, it is usually one of three things: they got engaged, they bought a house, or they had a baby. My client’s situation was not one of those three, but he was close. My client and his wife had just found out the day before that they would be having a small addition to their family in 8 months. His question, being the responsible person that he was, what legal documents he and his wife should have prepared before the baby was born.

Most people understand that they need to update their plans after a baby is born. What gets lost in the shuffle of all the other stresses of pregnancy is the fact that good planning possible, and even preferable, during the pregnancy.

Regular readers already know that I am going to suggest the basic trinity of legal documents; a will, power of attorney, and healthcare directive. Even if you already have these documents, they should be updated to account for the unique issues found in pregnancy and being a new parent.

Will

Your will should always include terms that specifically address how your children should be treated. A will can easily be written to include children that have not been born yet. It is not unheard of for parents to die before or soon after the birth of their child; and you should have a plan that reflects this possibility. Your will should be updated to include any children that are in gestation at the time of your death. This is particularly important if you are an unmarried father, as it can be difficult to prove a child as an heir in many situations.

Your will should also include guardianship provisions for who should care for your child after they are born. Should the guardian be a beneficiary of the will or a trustee in order to make sure that they have the resources to care for your child? This question must be answered in any estate plan of an expectant parent.

Another issue that must be covered under any will of an expectant parent is how you would wish your child to receive any property. Children can’t receive property until they are 18, so you must designate a custodian for the property that you trust. In many cases, a trust may be appropriate so that your child would receive the money at a later age, such as 21 or 25, because the safe bet is that an 18 year old will not be responsible with property, regardless of where they received it from.

The last major issue that should be covered in the expectant parent’s will is whether they wish to set up a savings account or investment account for the child either under the Uniform Transfer to Minors Act or as a 529 college savings plan.

Health Care Directive

In most cases, pregnancy results in at least one trip to the hospital. Because it does carry the risks of some major medical issues, it is imperative that the mother have a health care directive that outlines her basic medical ideals. At the very least, it should state who her preferred agent is and provide a HIPAA authorization. You can be as specific as you want in a health care directive, meaning that you can outline what procedures and drugs you want or don’t want during labor should you be unable to communicate those wishes to your doctor.

While you’re drafting your estate plan, it doesn’t hurt to make sure that daddy has a health care directive too.

Power of Attorney

A power of attorney grants someone else the authority to manage any of your financial and legal decisions. If complications during pregnancy or labor limit the mother’s mobility, a power of attorney makes it exponentially easier for another person to take care of basic errands such as paying bills, running to the bank, and handling any individual accounts. Planning for these situations means that you can always concentrate on your health and the health of the baby first.

At some point during or immediately after a pregnancy, most households go down to one income for a period of time. Any income earner in a household should ensure that another member of the household is authorized to access their accounts should they be unable to do so. This ensures that bills continue to be paid in the event of any unforeseen event. A power of attorney should be drafted for all the parties involved in the pregnancy and early childhood care.

Life Insurance

If you do not have life insurance, you should definitely purchase at least a small policy now that you are expecting a child. Though nothing can replace growing up with a parent, a life insurance policy will make sure that the guardians of your children have the resources to care for your child as you would wish they should be raised and can ensure that you child has the option to go to college or purchase a house in their early adulthood.

Many parents make a plan after their child is born. Smart parents do it beforehand. It is very easy to update your plan once your child is born to include their name and birth date. At my firm, that service is offered for free if you have your estate plan drafted through Alex Bajwa LLC before your child is born. There is no excuse for not having a plan for your child before they are born.