Question: I just had my first baby, and I know I need a will to make sure she’s taken care of if something happens to me. But this got me thinking about bigger-picture needs with estate planning, which is something I’ve honestly never thought about before. What documents do I really need?
First of all — congratulations on your new baby! Bringing a child into the world is a life-changing event in so many ways, and really does change how you think about the future. Making sure your child is protected in case something happens to you is one of the most responsible things you can do. A few of the key documents you need to have in place in order to get the peace of mind you’re looking for are:
A will is the cornerstone of any estate plan, especially when you have kids. If you don’t have one, state laws will determine who inherits your assets — and more importantly, who takes care of your child if something happens to you. That’s not a decision you want left to the courts.
When writing your will, you’ll need to:
While it’s best to have an attorney draft your will, you can also create one yourself using reputable online services like LegalZoom, or Trust & Will. Just triple check everything to make sure it’s legally valid in your state. Or split the difference and hire an attorney for an hour or so to review the computer’s work.
A living will may sound like it’s just another version of a will, but it’s actually a completely different document that speaks for you while you’re still alive, outlining your medical wishes when you can’t voice them yourself. (Because here’s the thing: estate planning isn’t just about what happens after you’re gone, it’s also about making sure your wishes are honored while you’re still alive.) This is where a living will and health care proxy come in.
Having these documents in place ensures that the person YOU choose is making your critical health decisions whenever you can’t.
Life insurance is always a good idea to make sure your loved ones are taken care of in the event of your passing, but once you have a child, it becomes essential. (For example, if something were to happen to you, would your partner be able to afford child care, housing, and education expenses?)
A solid term life insurance policy can provide financial protection and ensure that your loved one’s future isn’t left to chance. Here’s what to consider:
If you already have life insurance via work, that’s great — but it’s probably not enough. Workplace policies often provide coverage that’s equal to a year’s salary, which probably won't be enough for most families. Chat with HR to see what you qualify for.
The best place for your emergency savings is somewhere safe (as in low-risk and NCUA-insured), and accessible where it will earn the highest possible interest rate. High-yield savings accounts (HYSAs) and money market accounts are generally the best two places to keep your emergency funds. HYSAs offer simplicity, safety, accessibility, and decent interest rates. Meanwhile, money market accounts pay rates comparable to HYSAs but often have higher minimum deposit requirements. Talk to your credit union professional to see which type of account may be right for you.
Getting these documents prepped is key — but so is organization. They won’t do anyone much good if no one knows where to find them. Make sure your estate plan is organized and accessible to your trusted family members, attorney or executor, and keep originals in a secure place, like a fireproof safe or safety deposit box.