Whether you are expecting, preparing to adopt or already have children, it is important to make sure your family is legally protected. It is never too early to prepare for your children’s future, but waiting to prepare could be disastrous. These tips are designed to help guide parents through the planning process.
- Develop an Estate Plan – Protect your family’s financial interests with an estate plan. Talk to an attorney about a trust and setting up a Will.
- Carefully Select a Guardian (Custodian) – Selecting a guardian for your children can be difficult for many reasons. However, it is important to carefully consider the willingness, financial responsibility, age and health of a potential guardian. It may be beneficial to appoint a separate trustee (conservator) to govern your children’s finances. Your law firm can help you understand the laws where you live and guide you towards the best decision for your family.
- Purchase Life Insurance – Term life insurance is often more affordable for parents, but examine all of the options available and consider how much your children would need if something were to happen to you. It may be beneficial for women planning a pregnancy to purchase life insurance before becoming pregnant. Some health issues that may arise during or after pregnancy could affect the cost or ability to purchase insurance. If you are not sure about an amount; I recommend at least 5 times yearly earning on at least a 20 year term. Don't underestimate life insurance coverage. Figure in the cost of your house with taxes and insurance, college, cars, clothes, health insurance, food, sports, camp, utility bills etc. Life insurance is the most important insurance your family can have and it is the most selfless insurance you can buy because you are not buying it for yourself.
- Review Health Coverage – Examine the costs and exclusions included in your health insurance plan. Adding a child or children can be expensive. Expectant parents should also understand the potential costs of labor and delivery and save accordingly. Look up your deductible and coinsurance amount. Look at your in-network and out of network max out of pocket.
- Know Your Employer’s Leave Policies – Some policies may be governed by state or federal law while others may be at the discretion of your employer.
- Consider Short- and Long-Term Disability Insurance – Working mothers should prepare for maternity leave by purchasing short-term disability insurance to cover any unpaid portion of their leave. This insurance generally needs to be purchased before becoming pregnant so plan accordingly. Long-term disability insurance is every bit as vital as life insurance. An extended illness can be financially devastating.
- Savings – It is important to save first for emergencies. Once you have enough savings to cover two to three months without income you should begin saving for your children’s education. There are multiple options for college savings such as prepaid tuition plans, dividend reinvestment plans, and tax-advantaged savings plans. Examine all of your options to find out which plan is best for your family
- Daycare — one thing that I didn't look into and was a little shocked at was the cost of daycare. If you think adding your kids to your health insurance is expensive then daycare is going to give you a melt down. At least with health insurance you are not paying per kid. I spend more on daycare than I do on my mortgage.