Creating an estate/action plan after a child is born

The birth of a child is one of the most joyful occasions a person can ever experience. But, as any parent will tell you, it can also come as a huge shock to the system - all of a sudden you are responsible for protecting this tiny, vulnerable human who you love more than you ever thought was possible. This can easily overwhelm even the most stoic parents.

The good news is that there is a lot you can do to protect your child. One of the most important steps is to create a comprehensive estate plan, or what we at Cohen Law Services like to refer to as an action plan. An action plan will ensure that your child is taken care of in the unfortunate event that one or both parents pass away.

Common estate/action planning strategies

Preparing an estate/action plan is complicated and technical, so it is best to enlist the help of an experienced elder law attorney. It would be a tragedy if your estate/action plan failed just when it was needed most.

With that said, it is helpful to have a basic understanding of estate planning so that you can be an informed participant in the process. Below is a list of the estate/action planning tools that all new parents should consider:

  • Wills: A will is a document that controls what will happen to a person's assets after they pass away. In addition to directing what happens to your money and possessions, a will can also name a guardian for your child. Without a valid will in place, your child might end up in the care of someone you may not have chosen. In addition, the Probate and Family Court will be required to make this decision for you. This is a public proceeding that can be costly and time consuming.
  • Trusts: Trusts are tools for passing money on to loved ones, to manage the assets of minors potentially, also while minimizing the estate tax liability. Parents can use these tools in a number of ways. For example, some parents choose to set up a trust to provide a predictable source of funds in order to provide for the education, health or welfare of a child. For example, while a child is in college, you may want to ensure that their tuition, books and living expenses are sufficiently met. Parents of disabled children should strongly consider setting up a special needs trust to provide a standard of living beyond what Medicaid or other government benefits will cover.
  • Health Care Proxies and Power of Attorneys: Unlike wills and trusts, which plan for death, Health Care Proxies and Power of Attorneys come into play when a person is incapacitated from either injury or illness. They describe your wishes and name a person who will be responsible for making medical and financial decisions on your behalf when you are unable to make them. These tools can minimize confusion in the event of an emergency, ensuring that your loved ones are able to focus their attention on caring for your family. They also alleviate the need to apply to the Probate and Family Court to have a guardian and/or a conservator appointed. The Court process can be extremely time consuming and expensive. However, it is completely avoidable when you have what most estate planners consider to be the two most important documents in your action/estate plan.

In addition, in order to be better prepared when you meet with an elder law attorney, you should review the beneficiaries on your retirement, investment and insurance accounts to ensure they are in line with your wishes. Furthermore, you may want to consider purchasing a new or supplemental life insurance policy to provide a financial cushion in the event that one or both parents pass away.

Get help from a lawyer

After a child is born, it can feel hard to make time for anything but the basics. However, it is critical that you get an estate/action plan in place so that your family can be cared for if the unthinkable happens. The attorneys at Cohen Law Services will consider it a privilege to work with you to identify your goals and create an action plan that will keep your family safe for years to come.