Baby on the way - Will/Trust needed?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
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Stryker16
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Baby on the way - Will/Trust needed?

Post by Stryker16 » Tue Mar 20, 2018 11:48 am

I am 28 years old, married, and have a baby on the way. I am hoping someone can help guide me on the right path to make sure my wife and kids are protected and there is a plan in place if something were to happen to me.

What type of documents do I need? Will? Power of Attorney (financial and health?) Living Trust?
Should I find a lawyer in my town that does this? Or go through an online vendor?

I have about 350k in assets and 50k debt, so about 300k net worth.
I have a 10 year, 1 million dollar term life insurance policy currently on myself.
Also, my wife and I signed a POA agreement for health related decisions, but does that need to be filed or something? Currently in the safe.

Thanks for your help.

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Alexa9
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Re: Baby on the way - Will/Trust needed?

Post by Alexa9 » Tue Mar 20, 2018 11:55 am

I would get term life insurance on your wife as well. Daycare is expensive. May want to increase the amount on yourself as well.
A will for both of you makes things much easier for your estates. If it is simple, it shouldn't be expensive and you can write up the basics before meeting with an estate attorney. There are some online services that will do it as well for a bargain.
If either of you end up in a coma/brain dead or similar, you may want to specify how you want to handle it while you're at it.

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Sandtrap
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Location: Hawaii😀 Northern AZ.😳 Retired.

Re: Baby on the way - Will/Trust needed?

Post by Sandtrap » Tue Mar 20, 2018 1:11 pm

Welcome.
Congratulations!

Seek reputable legal counsel in your area, in person.
Estate lawyer or your family lawyer.
The larger the assets, the more a trust vs will may be applicable.
Read:
Beyond the Grave: The Right Way and the Wrong Way of Leaving Money to Your Children (And Others) by Gerald M. Condon
https://www.amazon.com/gp/product/08873 ... UTF8&psc=1

j :D

JoeRetire
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Re: Baby on the way - Will/Trust needed?

Post by JoeRetire » Tue Mar 20, 2018 1:52 pm

You both need wills. Use an attorney.
You'll both need term life insurance for more than 10 years. 20 would be the minimum.

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flamesabers
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Re: Baby on the way - Will/Trust needed?

Post by flamesabers » Tue Mar 20, 2018 1:57 pm

Once your baby is born, you and your wife should update your will to specify who will be the guardian of your child in the event both of you die before your child's 18th birthday.

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BL
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Re: Baby on the way - Will/Trust needed?

Post by BL » Tue Mar 20, 2018 2:00 pm

Making The Most of Your Money Revised, Updated, Subsequent Edition
by Jane Bryant Quinn (Author)
Maybe you could pick up the above at the library (or Amazon.com) to get good basic personal finance advice including wills, etc. It is not too expensive to buy, and is a great reference to have on hand for many other topics.

I have liked the Nolo books as well, even though I don't make my own will.

Since you will have a child, you need to consider guardians of the person and the inheritance should the child inherit if both of you die. You probably need a will and should see a lawyer experienced in this area.
Consider term insurance for both of you while child is young. See term4sale.com or independent insurance broker for term, so they can shop various companies.

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dm200
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Re: Baby on the way - Will/Trust needed?

Post by dm200 » Tue Mar 20, 2018 2:27 pm

flamesabers wrote:
Tue Mar 20, 2018 1:57 pm
Once your baby is born, you and your wife should update your will to specify who will be the guardian of your child in the event both of you die before your child's 18th birthday.
You can (we did) do wills before baby is born specifying child(ren) - without naming - with a testamentary trust until they reach a certain age.

My understanding is that naming guardian(s) in a will is not binding.

J295
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Re: Baby on the way - Will/Trust needed?

Post by J295 » Tue Mar 20, 2018 3:23 pm

Congratulations!

And experienced estate plan attorney should be able to handle all of your needs quite easily. This is not complicated for a capable lawyer. You can read books if you’d like more detail, but if it were me I would go in and let the lawyer explained it to me with a 30,000 foot view and be comfortable.

Definitely name a guardian in your wills, and name a back up as well. I also recommend your wills contain provisions for a testamentary trust for your child in the event both of you pre-decease him/her. I believe a corporate trustee is the better choice in nearly all circumstances. Absent unique circumstances, I would not be looking at revocable living trust agreements at this time, as if I were in your shoes I would be wanting to save on legal fees and honestly to me they are not cost justified in your situation.

hale2
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Re: Baby on the way - Will/Trust needed?

Post by hale2 » Tue Mar 20, 2018 6:40 pm

dm200 wrote:
Tue Mar 20, 2018 2:27 pm
flamesabers wrote:
Tue Mar 20, 2018 1:57 pm
Once your baby is born, you and your wife should update your will to specify who will be the guardian of your child in the event both of you die before your child's 18th birthday.
You can (we did) do wills before baby is born specifying child(ren) - without naming - with a testamentary trust until they reach a certain age.

My understanding is that naming guardian(s) in a will is not binding.
Yes, definitely do it before. We had just moved to a new state and had an appointment to update our trust the month after the baby was born. My wife didn't make it so I had to use the older trust that didn't have anything specific for a couple with a child (just the standard boilerplate). Caused some complications for me.

Nutmeg
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Re: Baby on the way - Will/Trust needed?

Post by Nutmeg » Tue Mar 20, 2018 7:47 pm

Stryker16 wrote:
Tue Mar 20, 2018 11:48 am
I am 28 years old, married, and have a baby on the way. I am hoping someone can help guide me on the right path to make sure my wife and kids are protected and there is a plan in place if something were to happen to me.

What type of documents do I need? Will? Power of Attorney (financial and health?) Living Trust?
Should I find a lawyer in my town that does this? Or go through an online vendor?

I have about 350k in assets and 50k debt, so about 300k net worth.
I have a 10 year, 1 million dollar term life insurance policy currently on myself.
Also, my wife and I signed a POA agreement for health related decisions, but does that need to be filed or something? Currently in the safe.

Thanks for your help.
I am a retired attorney, but estate planning wasn't my area of practice, and of course nothing I say here should be interpreted as practicing law.

You will need an attorney who is licensed to practice in your state (not necessarily an attorney in your town) to prepare your estate planning documents. Please note that whether the guardian of the person of your child should be named in your will is a matter of state law and practice. In some states, you would be advised not to include the guardian in your will, but rather to name a guardian on a separate piece of paper that is filed with your estate planning documents. This was the case in one state we lived in while the children were young. In that state, our wishes would have been considered by the court. Not including the guardian in the will allowed us to change who we named easily when circumstances changed.

mushyyy
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Re: Baby on the way - Will/Trust needed?

Post by mushyyy » Wed Sep 05, 2018 10:34 pm

Bumping it up to ask a related question:

Most of my assets are in interactive broker, which has a function where I can set a beneficiary of the assets.

Do I still need a will?

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flamesabers
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Re: Baby on the way - Will/Trust needed?

Post by flamesabers » Thu Sep 06, 2018 4:15 pm

mushyyy wrote:
Wed Sep 05, 2018 10:34 pm
Bumping it up to ask a related question:

Most of my assets are in interactive broker, which has a function where I can set a beneficiary of the assets.

Do I still need a will?
Why wouldn't you want to have a will? Even if it seems redundant, a will helps to cover your bases in the worst case scenario. For one, you get to name your executor as opposed to whoever a judge appoints. Also, you get to decide who gets whatever assets outside of your interactive broker instead of relying on your state's laws to distribute your estate. Lastly, consider the circumstances for your surviving family members. Having a will means one less task they have to deal with when they would already be stressed out from grieving over your death.

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