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Health & Fitness

You Had a Baby. Now What?

We brought our first-born child home from the hospital on a blustery February day.  Carrying our son upstairs, we placed him in the middle of the master bedroom bed. My wife and I stared with fascination at our wide-eyed and totally helpless little human being. The same thought struck us both. Now what? Ahhh...we’ll take pictures!

Babies don’t come with operating manuals. It’s learn as you go, with helpful advice from others who have been there, done that, especially  grandma! My wife and I were overwhelmed at first, recognizing total responsibility for our newborn gift of life, along with new challenges as a supportive spouse within our roles as dad and mom.

 One thinks back to his or her childhood. What did we learn? What do we want to foster in our child? What values do we wish to teach? What mistakes do we wish to avoid? The birth of a baby is a life transition that will carry through the rest of your earthly sojourn, and beyond.

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 From the get-go there are vital financial planning decisions. How will raising a child influence career decisions? How does added responsibility impact earning, savings, and spending goals?

 Do you have a will that incorporates trust provisions for the child and future children? State inheritance laws vary; seek information for your state of residence. In Georgia, if you are married with children and die without a will, your spouse and children will share equally your estate with the spouse entitled to no less than one-third of your estate. With one newborn, your spouse and child each will receive fifty percent of your estate. If you have three children and a spouse, for example, your spouse will receive one-third of your estate and the three children will share equally the remaining two-thirds.

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 Spouses are startled to realize given the premature death of their husband or wife, without a will the surviving spouse may not inherit all of the marital property, while becoming a conservator for the children until they reach the age of majority.

 For single and married parents alike, thought must be given to a disaster that leaves a child an orphan. Who would raise your child? Who would be contingent parents if the first designees could not serve? A will designates who steps in.

 Your will should incorporate trust provisions for children, naming a trustee and successor trustees. You specify at what ages and under what conditions assets are distributed to adult children and in what proportions.

 If you have a special needs child careful planning is critical. Trusts must be crafted as a Special Needs Trust so as not to disqualify a minor or adult child from needed public benefits. One expert noted that “seventy-percent of the special needs planning that she sees is wrong.”

 Life insurance is a vital component of planning. Loss of a parent, loss of a breadwinner, is a life-altering event. Substantial funding is needed and high face amount level and renewable term life insurance is a gap-filler. For special needs planning, a different and more complex insurance solution is required.

 Breadwinners should check on disability coverage. Loss of income can derail the goals you have for your family. Group insurance is fine but often inadequate.

 As you accumulate assets in 401(k), IRA, or other retirement plans, specific provisions must be made in the will for minors to receive assets if there is no surviving spouse.

 You may wish to capture the time value of money and begin funding college savings plans. Grandparents often help with contributions. Don’t wait until junior or little sis is in high school to start saving for college! Think about where you were 18 years ago. That’s how fast time flies!

 My children now have children of their own. My son and daughter turned out well, with credit given primarily to my wife who nurtured them while I built a business.

 Congratulations mom and dad! You have embarked on an amazing journey!

 Lewis Walker is President of Walker Capital Management LLC. and Walker Capital Advisory Services, Inc., a Registered Investment Advisor (R.I.A.) Securities and certain advisory services offered through The Strategic Financial Alliance, Inc. (SFA).  Lewis Walker is a registered representative of SFA which is otherwise unaffiliated with the Walker Capital Companies. ▪  3930 East Jones Bridge Road ▪ Suite 150 ▪ Peachtree Corners, GA 30092 ▪ 770-441-2603 ▪ lewisw@theinvestmentcoach.com

 

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