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Parents, You Need a Will

I just wrote an email that I'm never going to send. It was in response to a close friend telling me how excited and nervous she is to be a first time mom. Normally, when we talk about preparing for her baby, we tend to chat about breastfeeding versus formula and which sleep training technique I used with my daughter. While both topics are important, what I really think she should focus on is estate planning. But I don't have the heart to dim her maternal glow with such serious talk.

Just in case my friend or any other expectant parents are reading this, here's some unsolicited advice I think you need.


If you do nothing else, please draft a will. If something should happen to you and your partner, this is the only legal way you can name a guardian for your child. Without this document, a judge decides who cares for your little one. While your family members may not be that interested in your pregnancy now, don't be surprised if siblings and parents fight for custody of the baby.

Second, here's a little bit of information few couples know. When someone dies, the surviving spouse doesn't automatically inherit the assets. Without a will, most states will split the assets between the surviving spouse and the children. If the kids are minors, the money is administered by a court appointed guardian until the little ones turn 18. A will fixes all that.

While not a necessity, a trust can be a very useful document. Again, should something terrible happen to you and your partner, a trust allows you more financial control over your assets versus a typical custodial account.

Most importantly, a trust allows you to decide when a child inherits the money outright. If you're like me, you may not like the idea of your future 18-year-old or 21-year-old getting his hands on a lot of cash. (Can you say Ferrari?) In my trust, my daughter won't inherit any assets until she's 35. You may think this sounds extreme, but this way I know the trustee (the person who administers the trust) will make sure there's enough money to pay for college. My daughter will also have an incentive to start a career since she can't actually get her hands on her inheritance until later in life.

Life Insurance
Finally, I'm a big fan of life insurance. Unless you're really well off and have enough assets sitting in a bank account to support your partner and children for the next 20 or 30 years, this is something you should consider.

Fortunately, buying a policy is easy and pretty cheap. Opt for a 30-year term life policy (for roughly 10 times your current annual salary) and make sure you don't get talked into a pricey whole life policy. (Whole life is typically too expensive for young parents, which is why many people end up canceling their policies after wasting years paying premiums.)

Now that I've said my piece, we can get back to talking about layettes and the pros and cons of co-sleeping.

Knit Baby Booties image by normanack, CC 2.0.

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