Managing Your Wealth While You Grow Your Family: Part 2

By Nicole Young on October 26, 2023

Insurance, Employer Benefits, and Estate Planning Tips for New and Expecting Parents

Last month, we discussed managing your cash flow and expenses when having a baby. Through collaboration with new Private Vista parents, Greg Williams, Sean Julian, and Delaney Orozco, we assembled the following advice for parents-to-be.

Insurance and Employer Benefits

Prior to having a child, life insurance needs are typically covered by employer provided insurance or a smaller policy. Once a child is born, that need changes substantially. If something were to happen to one or both parents, it is important to ensure that there isn’t a burden for the remaining guardian or child.
If your employer offers a Health Savings Account, use it! Make sure your HSA has enough to pay your insurance’s maximum out-of-pocket costs for the first year.
Having a child is a qualifying event to change insurance coverages, so take the time to analyze your options. Evaluate both potential premiums and out-of-pocket maximums for your family. Usually, this change must take place within 30-60 days of the baby’s birth. Even if you’re not changing plans, you only have about 30 days to add your child to your health insurance, or you may face large costs that are not covered.
Be sure to enroll in a dependent care Flexible Savings Account if it is offered. A FSA is a pre-tax benefit account that can be used to pay for qualifying childcare expenses. Be careful to fund this only for your current needs, as funds above $610 remaining at year end are forfeited.¹

Estate Changes:

A will is needed to name a guardian of their child, which is important in case something were to happen to both parents. Otherwise, that decision would be left up to the court and may not be in line with parents’ wishes.
In the state of Illinois, any account held in an individual’s name without estate documents, or a named beneficiary, is typically distributed 50% to their spouse and 50% to their child. Do not leave this important decision up to the laws of the state.

In the state of Illinois, any account held in an individual’s name without estate documents, or a named beneficiary, is typically distributed 50% to their spouse and 50% to their child. Do not leave this important decision up to the laws of the state.

While having a baby is an exciting time of change for your family, it doesn’t need to be stressful financially. Looking for more resources to guide you through this transition? E-mail us at CMangan@myprivatevista.com.

Article by: Carrie Shoener, MSF, Private Vista Advisor

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