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Even Before Baby Arrives, Parents Need to Plan for the Future

MP900448410It is fun to shop for baby clothes and toys, but what your baby really needs is for parents to be prepared with an estate plan, financial liquidity and an understanding of health insurance coverage and costs.

The three most important things that soon-to-be parents need to do is outlined in a recent article from Business Insider, “The first 3 things to do with your money before you have a baby are easy to overlook.”

  1. Understand your health insurance. Pregnancy and birth are major medical events and result in big bills. With a high-deductible compared to a more traditional group plan, there could be a wide range in your share versus what the insurance company covers.
  2. Access to cash. You need liquidity, and should plan on keeping 12 months of anticipated spending in a checking, savings, or money market account that you can access easily, without unnecessary risk.
  3. Guardianship. There are some other things that many expectant parents fail to think about with kids. This includes insurance, wills, and guardianships. New flash: you're now responsible for someone other than yourself! If something unfortunate were to happen to you, you now have the added responsibility providing for the care of your children.
  4. Estate Planning. It’s common for those without significant assets to overlook their will and estate planning. This includes establishing who will raise your child should something happen to you and your spouse and how that care will be paid for. People forget about the guardianship of their children.

An experienced estate planning attorney will be able to clarify how guardianship works, guide you through the process of selecting a guardian for your child and how to plan for your child’s financial support, should anything occur to you. Putting all the pieces into place now will allow you to focus on the delights—and challenges—of welcoming a new member to the family.

Reference: Business Insider (August 22, 2017) “The first 3 things to do with your money before you have a baby are easy to overlook”

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