Top Five Estate Planning Moves Before Baby

8 mins read

Getting pregnant doesn’t just change your lifestyle, it also changes your budget and personal finance plans. So how should you plan for baby financially? You need to adjust your current lifestyle while preparing for the future. 

Preparing for parenthood is overwhelming. In reality, unless you have a high-risk pregnancy or multiples, the crib, diapers, and onesies can wait. Friends and family members will buy you a lot of gear and clothing, you’ll take whatever the hospital offers, and the rest can be ordered online. 

In my opinion, I think it’s more important to protect your family and get your legal and financial affairs in order. Here’s a list of documents and policies I recommend researching while you’re preparing for baby. Do one at a time, otherwise it’s too overwhelming.

Top Five Financial and Legal Action Items  

    1. Term-Life Insurance
    2. Will with a Trust 
    3. Healthcare Proxy
    4. Power of Attorney
    5. Beneficiaries

It’s important to have everything in writing and to make sure those mentioned in documents are aware of their role(s) and have a copy of the documents. We have hard copies filed and I emailed documents to my siblings and parents.

Remember, this kind of adulting involves painful conversations. No one wants to deal with legal documents, a pre-nuptial agreement, or life insurance, but they are a necessary evil. It’s not pleasant to think of divorce or death — but it’s better to be prepared than leave your loved ones to deal with conflict and court battles.   

Term-Life Insurance

Both parents should have term-life insurance, no matter how much each person earns. Remember even if one parent stays home with the kids, that is work too. The stay at home parent often handles grocery shopping, more childcare, cleaning, medical care and coordination with schools. In the worst case scenario, if the primary caretaker would to pass first and the kids were under 18, the surviving spouse would need to handle food delivery, lunches, caretaking and after school care, cleaning and doctor’s appointments. 

Another important note about term-life policies is, in my opinion, the younger you get them, the cheaper they’ll be. Note that they also seem to charge a lot more for people on mental health medications. So if you are thinking of going on SSRIs or anti-anxiety medications, you may want to get insurance first.

I’m not qualified to give advice, but after getting three policies between me and my husband, I can share my three main takeaways:

  • They charge men more, likely because they have shorter life expectancies than women.
  • They consider mental health drugs a serious risk, so people taking SSRIs or other similar medications have much higher premiums. 
  • Know the Comdex score of the insurance company, to gauge the risk associated with the company.  
  • This isn’t just for homeowners with kids. Everyone needs a funeral and that costs money. Add to that any debt you may have and it can be a pretty penny; you don’t want to leave your family to handle that while they are grieving. 

Will + Trust

We have a basic will with trust language included. It notes my and my husband’s executor’s, trustees of any trust for the kids, and a few terms about when the kids would get assets based on age. For example, if the kids are under 18 and we both pass away, the executor of the estate, also their guardian, would have access to funds needed to care for the kids.   

  • Note that the executor of the estate is given a big job. They have to liquidate assets if needed, to pay debts, sell any properties, and manage assets left to minors. 
  • Assets mentioned in a will still need to go through probate court while trust assets do not. 
  • You can set specific ages when your kids receive assets. For example, if you and your spouse die suddenly and your kids are not grown, you can state an age when your children get control of assets, say 25 years old.

Healthcare Proxy

We both have a healthcare proxy. Mine is different than the guardian for my kids. That’s because I felt the proxy needs to be able to make difficult decisions and have some experience in the healthcare industry. 

Power of Attorney

  • We each have power of attorney. I elected the same person who will be executor of my estate. This is the same person I chose as the guardian for my kids. You can see it’s a lot of work for those named. 


  • Life Insurance policies
  • IRAs: regular and Roth 
  • Employer Sponsored Retirement accounts, such as 401Ks
  • Brokerage accounts

This is a lot of work. My mistake — the reason I didn’t complete this until my kids turned 3 — was because I thought it all had to be done at once. In reality, I think it’s easier to do one at a time. 

This is the order I would attack it had I known the details and financials involved. 

  1. Set your beneficiaries because it’s a pretty quick process, so long as you know the people you’ll choose and their associated social security numbers. 
  2. Get Term-Life Insurance outside of your workplace. Get this as early as possible because the younger you and healthier you are, the cheaper it will be. We didn’t get it until we were 42 and 47;  that combined with some medicines we take made it quite pricey for my husband. 
  3. Will & Trust 
  4. Power of Attorney and Guardian
  5. Healthcare Proxy


This is for educational purposes only. I’m not a lawyer or advisor. I recommend getting an attorney your friends or family members worked with, to explain the process and draft agreements. Be sure to ask his/her fee up front. 

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