Setting Up Finances Before You're Due


Wills, guardianship, and life insurance— important details you should take care of when baby’s born

When you’re expecting a baby, there’s so much to do!  Shopping, choosing a name, preparing a will, and taking childbirth preparation classes are just a few of the things that will keep you busy.  No wonder the nine months go by so fast!


A will is a document that specifies who gets your money, possessions, and the custody of your underage children in the event of your death.  It also names your executor, the person you chose to ensure that your wishes are carried out.  Your assets, such as bank accounts, vehicles, furniture, and your house—if you own one—make up your estate.  But the executor’s job entails much more than reading the will and handing over property.

In the event of your death, your will is presented at probate court, where the executor you chose will be officially appointed and his or her duties will begin.  The executor will list all of your assets for the court, pay creditors, and distribute your assets according to your wishes in the will.  If your will has provisions under which the assets would continue to be managed for a period of time on behalf of the children, the guardian of the estate will be in charge.


The duties of the guardians become official during the probate process.  “Just as the executor needs to be formally appointed by the court to have any authority, the court would have to officially establish a guardianship,” says Burt Levitch, a trust and estate lawyer at Rosenfeld, Meyer & Sussman, LLP, in Beverly Hills, CA.

However, guardians of children do not have to wait until probate starts before bringing the child home.  As long as their names are in the will as guardian, they may start caring for the child immediately while waiting to be named legal guardian.


When choosing the guardians of a child, consider the age of the people in question.Ask yourself if they are likely to be around and capable of taking care of children into adulthood.  Consider geography, too, and if your children would be uprooted or moved away from relatives.  You’ll want to choose guardians with the same value system as you, too.  “This encompasses religion, political perspective, views on handling money, discipline, parenting practices, and many other things,” Richmond says.  It’s also important to predict a couple’s stability.



Your assets may be distributed through a trust instead of a will.  One type of trust is a revocable living trust, which is one tha t you set up and put money into during your lifetime.  Whether a will or a trust is the best option for your situation depends on the state where you live, the amount of as sets, and the value of your real estate.  “The trust is something that you create using a document that, like a will, specifies who gets what.  But it generally provides for the distribution of assets without court involvement,” Levitch says.  The person named as the successor trustee simply reads the document and follows its instructions

Whether your assets are put into a trust or a will, there are two types: real property and personal property.  Examples of real property are your house, an apartment building, or a piece of land.  Personal property is either tangible or intangible.  Tangible personal property includes things you can see, such as a car, your furniture, and jewelry.  Intangible personal property includes money in the bank and other financial assets.


Don’t have it?  Now is the time to get it.

What is it?  Life insurance pays out a designated sum of money if the owner of the policy dies in a qualifying manner.  The person who receives the money is called the beneficiary and is chosen by the insured person.  There are two kinds of life insurance: term, which is in place for a limited period of time, and permanent, which is coverage that remains in effect until the owner of the policy dies.


By Sharon Anne Waldrop

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  • Dan Canfield
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