Wills, Trust, Guardians: A New Parent's Guide to Adulting

New parenthood comes with some more logistical considerations (helloooo insurance paperwork) that aren’t quite as fun to think about as the best precious print for baby’s nursery wallpaper. After all, the last thing you want to think about when you just met your baby is what would happen if the worst happened. Yet, part of parenthood is asking those tough questions to ensure that your kid’s future is as secure as possible, and becoming a parent is a common time to consider these things—according to 2022 statistics from Trust & Will, an estate planning service, 34% of people began estate planning with the birth of a child.

These ‘adulting’ decisions can be overwhelming, especially if you don't know where to begin. So, we did the legwork for you, and chatted with Jennifer Salem, attorney at Michaelson Law in Las Vegas, about the tough stuff on your to-do list: wills, guardianships, insurance modifications and if/when you need to start thinking about them. Excited yet? You will be when this is all set up and you can get back to building your family and their future with peace of mind.

Build your team

To get started, you might want a few key people in your corner, and in your phone’s contact list for easy access:

• An estate planning attorney, or if you're using a DIY will maker online or other online legal service, their help line or email

• A certified accountant (CPA) to ask all your tax questions 

• A financial planner, who can help you strategize about Roth IRAs, retirement planning, 529s and more (note: sometimes your financial advisor and your CPA are one person, sometimes not)

• A contact at your health and life insurance companies

• A contact at your employer’s HR office or similar to direct questions around health insurance

Though you don’t need all these people at once, it’s a list to start building so you have the resources you need before there’s an issue or question.

Make a will, a trust, or both

Wills and trusts go far beyond who will inherit those heirloom pieces. (The fact that you’re even looking into this puts you ahead of the curve; according to LegalZoom, only 33% of adults have created estate documents, including wills and trusts.)

“It is never a bad time to have a will, or even better, a trust in place for you and your family. Many people think, ‘I'll have time to do this later,’ or ‘I'm not sure what to put in my will,’ or, ‘A trust is too expensive,’” says Salem. “So, the documentation of what happens when you pass away goes untouched and becomes ‘someone else's problem’ when the inevitable happens.”

First, you might need to determine if you want a will or trust. The National Council on Aging (NCOA) clarifies the difference between a will and a trust: “A will is a simple legal document that provides instructions on how to distribute property to beneficiaries after death, while a trust is a complex legal contract that allows you to transfer your property to an account to be managed by another person.” You can have both a living will and a trust if you want; a trust is often a better idea if you have a more complex estate such as substantial assets or multiple properties.

Online will and trust generators cost around $0–$199 for a will and $139–$440 for a trust. However, you may prefer to go through an estate planning attorney, especially if you need to determine what you need and talk through the options. The cost of an attorney can vary wildly, from $150-$500 an hour. And keep their contact handy, because it’s not a one and done process.

“The thing many people don't realize is that a will or a trust can and should be updated as your life progresses. New parents should absolutely name their newborns as their beneficiaries through the trust vehicle with proper guidelines in place,” Salem says, advising parents to keep documents updated to include things like new assets, additional siblings, divorces, change of circumstances, etc.

“Keeping an up to date will or trust should be a common practice, like brushing your teeth or driving the speed limit,” Salem says. “Just make sure your loved ones or your executor has the latest copy once you've made your updates.”

Here’s what to do next if you are ready to start a will or trust:

• Talk to friends, acquaintances, or ask around on your local social media groups to see who has had successful experiences (with rates you are comfortable with) in your local area

• Consider an online legal service, such as will makers recommended by the NCOA, including trust&will, Quicken WillMaker, and LegalZoom. The latter is if you want access to attorneys rather than a DIY concept

If you choose an attorney, you can also check out your state or local bar association, along with other resources the Consumer Financial Protection Bureau (a U.S. government site) provides.

Designate a guardian

It’s literally the last thing you want to think about when you have a new baby, but what if something happens to both you and your partner? You’d want control over the answer, for your baby’s best interests.

“In a situation where a guardian is not clearly identified, a minor may become a ward of the court until a suitable guardian is found. Courts will generally have a priority list of who they will contact for guardianship if one isn't clearly identified—grandparents, siblings, close family members, etc.,” Salem says.  

Some families elect to have a “godparent” who will keep the child if something happens to them, or you may have a family member in mind, but this is where documentation is important, again.

“It is always recommended to include a guardianship chain of custody in your will or trust. Many people think, ‘Oh my sister will just take them.’ The reality is that if your wishes and your sister's consent aren't aligned a big problem could be brewing,” she adds.

Update your health insurance 

As those hospital bills start rolling it, you likely already know that you need to get that baby added to your health insurance plan stat. But what does that involve?

This is one you can start figuring out before your due date. Contact your employer and/or health insurance company for the next steps and correct timing on adding your new baby to your health insurance. This matters because the baby will start needing healthcare the minute they are born, and their first well visit will be shortly thereafter. 

Your insurance company will likely give you a window of time to add the new baby to your plan, and will require specific paperwork, such as a birth certificate, social security number or other requirements. These documents can start getting filled out in the hospital, and often the hospital provides information on next steps. 

If your baby is going to use government marketplace coverage, you have 60 days from their birth to complete the application.

Don’t stress if your baby doesn’t have an insurance card immediately—hospital and pediatricians know it takes a bit of time, and insurance is typically retroactively applied. This means if your baby has a well visit or another medical issue requiring treatment, once the insurance recognizes your application, it will cover treatments since the birth.

Open a College Savings Account—Because Babies Grow Fast

The last thing on your mind might be the cost of college. And if you're just recovering from unpaid leaves coupled with hospital bills, you might not want to look too hard at those numbers just yet. But what you can do is get set up with a plan to start saving for college, if that’s one of your family’s financial goals for your children.

You have multiple options for saving, and can consult your financial planner to weigh the best fit for you, but some families opt for a 529 plan. 

“College saving accounts, aka 529 Plans, are a great way for a parent or guardian to save money on taxes while building up a fund for a child to help pay for college. Generally speaking, these start with an investment close to the child's birth and the money will accrue interest over the next two decades,” Salem says. “Money can also be added to those accounts either in regular intervals or lump sums as desired.”

Though 529s aren’t tax deductible in all states or federally, there are tax benefits for the investor and limits of donation to 529 plans. She recommends asking your accountant the following questions:

• Ask your CPA: What happens if my child doesn't go to college? Talk to them about rolling your 529 into a Roth IRA if the child doesn’t use it for education.

• What happens if I need to use that money for an emergency?

• What are my overall tax implications with a 529 college savings plan?

Don’t feel you have to tackle all of these items in the first weeks or months postpartum. Instead, get the ball rolling, and prioritize the most urgent items, like adding your baby to your health insurance policy, and set a goal for the other items to be completed. Even if it doesn’t all happen until your new baby’s first birthday rolls around, taking small steps will ensure everything is in place just in case—a long term gift you can give your child now that’s even better than the perfect nursery.