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Estate Planning: Nesting for the Modern Parent: 3 Steps New and Expecting Parents Should Take Now

Whether you’re a brand new parent or expecting soon, you won’t want to miss this expert estate planning tips from CFP Rianka Dorsainvil.

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Rianka Dorsainvil, @Rianka_D

CFP® & Co-Founder, 2050 Wealth Partners

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[WRITTEN BY TRUST & WILL PARTNER RIANKA R. DORSAINVIL - CERTIFIED FINANCIAL PLANNER]

Did you become a new parent this past year, or are you expecting a quarantine baby in the coming months? If so, congratulations! I welcomed my first child almost a year ago and the experience has been nothing short of life changing.

The truth is, as you’re navigating the ins and outs of pregnancy, the last thing on your mind is likely estate planning. But if you haven’t already discovered, when you’re a new parent or expecting there’s always something on your mind! So, having all of your affairs in order before a baby arrives just makes sense - consider it one of your many “nesting” tasks.

Not there yet? Don’t worry. Here’s a simple three-step plan to get started.

Step 1: Choose a Guardian

Just like they do at the hospital, parents should have contingency plans in place for the care of their children in the unlikely event they both become incapable of raising a child.

Besides choosing an individual, also consider the guidelines of how you’d like your child to be cared for: type of lifestyle, health and education considerations… and, remember, these plans are meant to be adjusted as years go by. Don’t worry about making the right choice for forever, but the right choice for now. We are aiming for more peace of mind. 

Completing a Nomination of Guardian form is quite simple: answer a few questions about your family, and then once the documents have been prepared, find two witnesses to sign in addition to your own signature. 

We’re on our way!

Step 2: Create a Trust and Choose a Trustee

Before a child is born, parents should confidently plan their Estate with their son or daughter’s security and future in mind. One of these ways could be by creating a Trust. This Trust holds assets (financial, material and otherwise) that can be passed onto a minor child if needed and will be managed by a Trustee of your choice. If called upon, this individual will distribute the assets according to the agreed-upon terms. 

Items to consider when creating a Trust are:

  • Caregiving directs, including healthcare and education;

  • Assets, like real estate, vehicles, and jewelry; and, 

  • Financials, like retirement accounts, investments, cash, and more. 

Know that Trust’s don’t have to turn all assets over to children at the age of 18, instead you have flexibility in the age range as long as you are specified with your wishes and language in the document. 

It’s easy to start with Trust & Will’s customizable and comprehensive Trust options. Now we’re really cooking, but we should be careful to look at this holistically. 

Step 3: Remain Flexible! 

One of the first things we learn as parents is how to be flexible. Indeed, flexibility plays a major role in our lives from adjusting travel plans around a child’s illness, or calling out of work when daycare closes unexpectedly. 

I encourage you to invite this concept of flexibility into your finances as well. Consider that your child could potentially have special needs that require additional resources to support them throughout life. A Special Needs Trust will allow them additional financial support without discounting them from other benefits. More to come on this topic in future blogs. 

Be flexible! 

Go “All-In” on Saving Your Energy

If you’re just starting the journey of parenthood, it may be hard to fathom the time management skills you’ll need to keep all the balls in the air. Add jobs outside the home into the mix (like so many of us do) and our “free time” becomes less and less.

While this sort of upfront planning seems like a distant imperative, consider it an exercise in saving time and energy. 

The truth is, the only way to protect the most important things in your life...now featuring your newest arrival, is by completing an Estate Plan. Choosing a Guardian, potentially creating a Trust, and considering the overall impact of how a child will affect your finances doesn’t take much of our time, and is sure to save you lots of energy in the future.

So after you grab that well-deserved nap, grab a pen and paper… we’ve got work to do!

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