Alkalay & Smillie, PLLC

Articles of Interest

Attorney Edward Alkalay writes a regular column for the Conway Daily Sun newspaper entitled "The Legal Corner." His articles address a wide variety of timely legal issues. Click on the titles below to review his past articles.
 

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The Legal Corner: The Legal Corner: Legal issues for new parents

When you are preparing to be a new parent, there are countless things that you must do to prepare: diapers, home safety, breast feeding or formula, clothes, toys and car seats to name a few. Let me suggest a couple of other items that you may not have considered, but that can be just as important. Just as you want to “baby proof” your house as much as possible for your baby, you should also “baby proof” your legal and financial affairs as much as possible. Creating a sound legal and financial plan will ensure that your child is well cared for in the future and protected in the event of unforeseen circumstances. In this article I will discuss some simple, yet very important legal and financial issues, which every new parent should be aware of.
(1) Saving for an emergency: To the extent possible, you should establish an emergency fund that covers three to six months living expenses. If this is not realistic, even a plan to cover one or two months is better than none. This will protect you and your child in the event that your child gets sick, your car needs repairs, you lose your job or any number of other unexpected costs arises.
(2) Saving for education: Along with your emergency savings plan, it makes sense to start saving for your child’s education as early as possible. There are a number of ways to do this, such as depositing a certain amount every month into a savings or money market account for your child, opening a 529 Plan, buying a prepaid tuition plan, or utilizing a wide variety of other options. For more information, check out this site: http://www.epinions.com/finc-topics-kidsavings.

(3) Estate Planning: Estate planning is often the last thing that new parents think about. After all, who wants to think about these issues as you are celebrating a new life? However, it is critical to your child’s well being that you plan and memorialize what should happen in the unlikely event that you die or become disabled before your child is fully grown. Both parents should have a will to make sure that your assets are distributed as you would like, to nominate a guardian for your child and to choose an executor for your estate. Drafting an estate plan with a lawyer’s help is the safest way to go, but if you cannot afford a lawyer, there are many online resources which can help you draft a will. If you already have a will, it should be reviewed upon the birth of a new child.

(4) Choosing a guardian: In conjunction with making a will, selecting a guardian for your child is extremely important. If you die without naming a guardian for your child, a court will decide who will look after your child and it may not be the person you would have wanted. Periodically you should rethink your choice of guardian as to whether that person is still appropriate given your and his/her circumstances.

(5) Setting up a trust: A trust can be a financially advantageous way to pass your assets along to your child. A trust may indicate how you want any money left to your children spent, at what age you want your children to receive their inheritance, and it can ensure that the money is well protected, among other things.

(6) Tax issues: There are numerous tax credits, deductions and/or exemptions that you may be eligible for when you have a child. You should speak to an accountant or research yourself which tax breaks fit your particular situation.

(7) Insurance issues: You should review your current insurance circumstances, including but not limited to health, disability and life insurance. Do you have enough? Can you afford more? Insurance provides yet one more security blanket for you and your child.

Welcoming a new life into the world is thrilling, tiring, awe-inspiring and more. To the extent that you can plan in advance (or shortly after your child is born) to protect against unforeseen circumstances, it will allow you to enjoy watching your child grow, while having peace of mind that your child will be as fully protected as possible.

Edward D. Alkalay is a partner at Alkalay & Smillie PLLC and can be reached at (603)447-8994 or ed@northconwaylawyers.com. (This article conveys general information and should not be relied on for legal advice without further research and/or consultation with an attorney.)

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