Establish a Living Trust

In essence, a Living Trust dictates what will happen to your assets should something happen to you and your partner. While it’s created while you’re living, it’s designed to facilitate the transfer of your assets to a designated beneficiary. Unlike a Family Will (covered next), a trust isn’t subject to probate (which can be a lengthy and complex legal/court process). A good Living Trust shouldn’t cost you a lot now, but it could save a lot of headache and money should something happen to you and your partner.

To do: Work with your Trust & Estate or Family Law Attorney on this. S/he will ask you a series of questions to determine how the document should be drafted up.

Designate your Family Will and Legal Guardianship

A Family Will basically lays out (in a legally-enforceable manner) what will happen to you and your assets in the event of your death. This is grim stuff, especially for a new family, but it’s critical. The difference between a Trust and a Will is that a Will includes things that aren't purely your assets. For example, it can include who you name as Legal Guardians for your minor child[ren], or, for example, instructions for how you’d like your memorial or funeral services to be held. Like a Trust, a Will does provide explicit instructions on how your assets are to be distributed to your beneficiaries, but, unlike a Trust, these instructions will be subject to probate upon your passing. This basically means a court will oversee the distribution of your assets.

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While this is one of the last things you want to think about at this time, you'll want to make sure your baby has Legal Guardians designated at, or soon after, birth. Talk with your partner and pick someone who shares your parenting philosophy and has the means and lifestyle to take care of a child. A set of grandparents or aunt/uncle is often an easy choice. Make sure to formally ask and discuss with these designated guardians; make sure they are up for the task, should something happen to you. Once you've chosen these people and Baby arrives, you'll want to make sure this is included in your legal Family Will. Again, these may or may not be the same people as your baby's Godparents.​

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If you do not do these things, guardianship, the distribution and treatment of your assets and debts will be determined by the court system and this could create a lot of undue pain and hardship to your surviving family members (and the outcome may not be how you wanted it!). 

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To do: Work with your Trust & Estate or Family Law Attorney on this. S/he will ask you a series of questions to determine how the document should be drafted up based on your desires. If you want to designate Legal Guardians for your baby, this is where and when you'll need to do that.

Outline your Medical Directive

A Medical Directive (sometimes referred to as “Living Will” or “Advance Directive”) is, again, a legally-enforceable document that details your preferences for medical care should you be unable to make decisions for yourself. You can learn more about the considerations for this document here. Again, heavy stuff, but critical now that you have a family of your own. The purpose of all of these documents is to make things as easy as possible for them in an impossibly difficult time.

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To do: Work with your Trust & Estate or Family Law Attorney to make sure this is included alongside your Family Will.

Update your Beneficiaries

This is something you can't start until Baby arrives, but it's important to think about it now so you don't forget amid all the excitement (and diapers). 

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Now that you'll have a dependent (!), you probably want to update the Beneficiaries on your life insurance, 401k, and/or any existing trusts. ​For life insurance, you can do this through your provider's website or your employee insurance portal. This also goes for an employee-sponsored 401k plan. ​For private retirement accounts or trusts, you'll need to go through the bank, financial advisor or trust attorney. 

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If you're looking for more information or guidance on this, you can reach out to an expert here.

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To do: When Baby arrives, don't forget to do this - it's listed as a task for Month 10.

Open a 529 Plan Account

This sounds premature, but it's not. 529 Plans are tax-free savings accounts where funds are designated for someone's education. They are uniquely powerful savings tools and, as of 2017, can be used for private education expenses from Kindergarten onward. The money invested in a 529 grows tax-deferred and can be withdrawn tax-free if used for qualified education expenses. While some states impose limits on how much you can contribute in total to a 529 Plan, there are no limits on how much you can contribute in a given year (although contributions are considered gifts, so you will want to be mindful of gift taxes).

You can open a 529 Plan account as soon as you have Baby's social security number. If you really want to overachieve, you can actually open one for yourself or your partner now and change the beneficiary to your baby once born (pro tip from my husband!). Further, if Baby gets a scholarship and doesn't need the funds, you can get this money back. Even if Baby becomes the next Bill Gates or an international teen pop star and decides to forgo college altogether, you can get this money back or change the beneficiary to a sibling, other family member or your dream culinary education at Le Cordon Bleu (seriously). It's an incredibly useful savings tool and one you shouldn't neglect.

There are many more considerations (like what state you open one up in - it doesn’t have to be yours) and you should consult with a Financial Advisor before making a decision. 

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To do: Find a Financial Advisor to help you navigate opening a 529 Plan. This can be done on self-serve financial planning sites, like Charles Schwabb, but you may want to work with an expert to make sure you're designing it specifically for your life. If you're looking for a Financial Advisor to help with this, reach out here.