A new child changes everything, including what happens if you cannot care for them. A short list of documents and decisions can protect your family and give you peace of mind.
Core documents
- A will naming a guardian for your child and an executor.
- A durable power of attorney for finances in case of incapacity.
- A health care directive and medical power of attorney.
- A trust for assets that will go to a child, if appropriate.
- Updated beneficiary designations on retirement accounts and insurance.
Life insurance
Term life insurance often provides high coverage at lower cost for young families. Consider how much income and expenses your family would need to replace, including housing, child care and education. Name beneficiaries carefully, and avoid naming a minor child directly without a trust or custodian arrangement.
Beneficiary designations
- Accounts with beneficiary forms pass outside your will.
- Review retirement accounts, life insurance and payable-on-death accounts.
- Name contingent beneficiaries.
- Coordinate designations with your overall plan.
Who holds the money
Minors cannot manage large sums themselves, and a court-supervised conservatorship can be expensive and inflexible. A trust or a Uniform Transfers to Minors Act account can hold assets until an age you choose, with a trustee or custodian managing funds in the meantime.
Accounts and property
List your assets and debts, how they are titled and who is responsible. Consider whether a revocable living trust would help, particularly if you own real estate or want to avoid probate. See our guide to will versus living trust.
Practical preparation
Store documents where trusted people can find them, share key information and passwords securely with your executor and guardian, and consider a digital asset plan. See our guide to digital assets after death.
Review schedule
Review your plan after major life events such as another child, a move, a divorce or a large change in finances, and at least every few years. Update beneficiary forms and guardian choices as circumstances change.
Real-life scenarios
- New parents name a guardian, buy term insurance and name a trust as beneficiary.
- A parent updates retirement account beneficiaries after a birth.
- A couple stores documents and shares access with their executor.
Common mistakes to avoid
- Putting off planning.
- Naming a minor child as direct beneficiary.
- Forgetting to update beneficiary forms.
- Not naming a guardian.
- Not planning for incapacity.
- Not telling anyone where documents are.
Questions to ask a professional
- How much life insurance do we need?
- Should a trust hold assets for our child?
- Who should serve as guardian and executor?
- Do our beneficiary forms match our plan?
- When should we review?
A practical action plan
- Choose guardian and executor.
- Get a will and incapacity documents.
- Buy appropriate life insurance.
- Update beneficiaries.
- Store and review your plan.
Terms you may hear
- Durable power of attorney: authority to handle finances if you are incapacitated.
- Health care directive: instructions for medical decisions.
- UTMA account: a custodial account for a minor.
- Contingent beneficiary: a backup beneficiary.
- Executor: the person who administers your estate.
Frequently asked questions
Do new parents need a will?
Yes, mainly to name a guardian and direct assets.
How much life insurance do we need?
Enough to replace income and cover major expenses for your family.
Should I name my child as beneficiary?
Not directly, since minors cannot manage large sums, so use a trust or custodian.
Do I need a trust?
Often helpful for assets passing to children.
How often should we update?
After major life events and every few years.