Estate Planning Isn’t Fun, But It’s Essential for Protecting Your Family: A Lawyer Explains Why

After having a baby, everything is chaotic. You’re sleep deprived. Everything is wet from milk, pee, poop, and night sweats. And your brain isn’t functioning at full throttle. So, the last thing you’re probably thinking about is estate planning, a.k.a. if something bad happens to you or your partner, what happens to your assets and more importantly, your baby.

I get it — who wants to even think about something so morbid! Before I became a mom myself, creating an estate plan was the last thing on my mind. Then my son was born, and everything changed. All of a sudden I was imagining too many scenarios leading only to my early demise. 

What would happen to my son if something were to happen to both my husband and I?
Who would raise him the way would? Who would provide for him financially?
What values would he grow up with? 

Maybe it was fueled by hormones, maybe it was the baby blues or PPA/PPD, nobody knows. The lawyer in me (although not an estate planning lawyer at the time), needed to get organized. I needed to get my proverbial ducks in a row. 

Through my late night googling, I was astonished to learn that 69% of parents had no plan in place should something terrible happen to them! And only 32% of Americans have a will!* I know it feels dark and perhaps pessimistic to plan for these things, but to me it feels careless not to! This is not a death plan, it’s a life plan. 

I fell deeper into a black hole of nightly internet searches about worst case scenarios.  Scenarios where there was no estate planning at all or poorly executed plans that led to court battles and conflict. I became obsessed as I pictured my parents and my in-laws fighting over my son, making my imagined nightmare worse. 

Soon after, I became an estate planning attorney.

In my experiences as a mom, and working with parents with young children, I realize how important it is not only to have these plans, but create them with intention. As moms, it’s our responsibility to make sure our loved ones are taken care of in all scenarios. And these plans ensure that the lives of our loved ones are safe. That no matter what happens in this wacky world, we are taking care of and loving them.

Since becoming a mom is…busy, I created a basic checklist to support you as you get those ducks (proverbial and otherwise) in a row. 

I know this can feel heavy, confusing,overwhelming, and not what you want to think about right now. That’s why I want to share with you the five most important things to protect and secure your family’s future. 

Guardianship Nominations

The first step to getting legal planning in place for the people you love is choosing the people you want to take care of your kids . (Yes, I said “people” because you want to name at least one person with two alternates.) This step alone can provide a deep sense of security. But! There’s more to it than naming guardians in a will. 

A guardian nomination document, which is a separate thing altogether, is vital. If you do not legally, in writing, clearly, directly, name these permanent guardians, the Court will decide based on who looks best on paper. 

When it comes to choosing your people, consider their values, experiences, priorities, location, and age. One thing that should not be a factor is their financial resources. Because it’s not really the guardian’s responsibility to provide financially for the child. So, consider all of the characteristics around who you want influencing your child’s life and honoring your wishes.

Life Insurance

As mentioned above, when choosing a guardian, financial resources aren’t necessarily their responsibility. This is why I always encourage parents to get life insurance. And get enough to adequately provide for your child.  

In order to avoid confusion, mix ups, or anything sketchy, I recommend designating a different person to handle this money. These two roles, guardian and money manager, can work together in the best interest of your child and in your honor.

I know it can be tempting to name your child as the beneficiary of your life insurance policy. I mean, that’s who you want to benefit from these funds should it be necessary. But it’s not always the best idea. 

Depending on the state they can’t receive any benefits until they are 18 (some states 21). And before then the funds would have to go through a court appointed custodian, which obviously comes with a fee, until your child is 18 or 21. And I don’t know about you, but I definitely wasn’t ready to handle that type of financial responsibility at that age. 

A better option to set your child up for success is a trust. The trust will receive the insurance proceeds, and a trustee will hold and distribute the funds to the child. You get to choose the trustee! Someone you trust to manage your child’s money. Even more importantly, the trustee will oversee how and when the funds are distributed and used. More on this a little later.

Still with me? Great. Now is probably a good time to get a drink of water or some postpartum aid and do a quick stretch because there’s more. 

Powers of Attorney

If for any reason a parent or guardian isn’t available to do things like sign a medical consent form, another adult can be authorized to do so with a power of attorney.

This is super important if a parent or guardian is going out of town for vacation, work, military deployment, or any other reason and will be leaving a child with friends or relatives. Or if a child is going to live with friends or relatives. A power of attorney for minor children is so important to make sure they are safe and able to be fully taken care of.

It is also important to have a power of attorney in place for you! I’m not trying to be a downer, but I have to be realistic. It’s my job! The benefit of having this in place is that the person you choose will be able to immediately step in in an emergency, without any court involvement, and make any financial or medical decisions on your behalf.

Update Your Health Care Documents

Advance directives allow you to choose who you want making decisions for you if you can’t do it yourself. Trust me, you want this. Because if you don’t plan in advance, your family may end up involved in some complicated hullabaloo they don’t need. 

Advance health care directives let you choose someone you trust to make healthcare decisions for you. A great example is a Living Will which allows you to communicate how you want to be treated if there is an accident, a major trauma, or during end-of-life care. And listen, I hope all of this is a waste of time and money, but if you need it, you and your family will be grateful. 

Understandably, we don’t like to think about end-of-life care. Who wants to think about dying? It’s sad and awful and inevitable. Ugh. I’m sorry, I have to be honest with you! These aren’t easy decisions, but they are important.  You have every right to make your wishes known now, and in the future. 

Revocable Trust (if you’re a homeowner or have assets over $100K+)

If you don’t have an estate plan, the state has an estate plan for you. It’s called probate and it’s the process during which your assets are transferred to your heirs after your death. Sorry again about the death talk. 

While I guess it’s good that there’s something in place, probate leaves a lot to be desired. In order to avoid a delay in the transfer of assets, additional fees taken from the estate, publication of how much money your child(ren) will be receiving, and your kids getting full access to their inheritance at 18, I suggest you consider a Fully Funded Living Revocable Trust. There is also something called an Irrevocable Trust, but that’s different and not what we are talking about here. 

When you create a trust, you choose how to distribute assets. For an idea of how trusts are often organized, most trusts distribute assets to their beneficiaries at ages or stages. For example, one-third at 25, one-half at 30 and the remaining balance at 35 or something like one half upon graduation from college and the balance upon graduation from graduate school. This protects your kids from coming to a large sum of money at the age of 18 when they aren’t ready to handle those types of finances. 

I know, that’s a lot of logistical, technical, legal information. I told you it’s not the most dazzling conversation topic, but it’s important. And it’s my job to ensure you and your family’s safety and security. 

The good news is that no matter how much you have, you can make the right choices that will keep your family out of court and protect them from conflict. Most importantly you can plan for the well-being of your kids. Contact your local estate planning information to ensure these foundational estate planning documents are in place. Then, you can enjoy the peace of mind knowing you are taking full care of yourself and your family. 

*Caring.com