| 10 tips for soon-to-be parents |
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While you're at it, study the family leave policies for both you
and your spouse. Options vary from workplace to workplace. Find
out exactly what each of your employers offers so that you can make
the most of it.
5. Shop
day care, if you think you might need it. "By all means,
get your name on a waiting list," says Miller. "You aren't
going to find day care just because you want it."
6. Revisit
your beneficiary selections. This is a good time to get out
the paperwork on any retirement and investment accounts to make
sure that, should the worst happen, your family is protected.
While you and your spouse probably want to name each
other as beneficiaries, you will likely want to name your child
as a secondary beneficiary so that he or she receives the money
if something happens to both of you. But check the fine print, different
types of accounts have different rules when it comes to passing
money on to a minor.
Sometimes, naming a child as beneficiary or secondary
beneficiary to certain retirement accounts can cause a problem,
says Foster. In the wrong situation, the plan could require that
the money be paid out in a lump sum, triggering a hefty tax bill.
Instead, you could name someone you trust to act as a custodian.
The custodian can legally make choices to prevent or mitigate lump-sum
payment requirements, he says.
This is also where a quick call to an attorney can
be helpful. Ask what, if any, language should be included on the
beneficiary line in your state. Basically, it will read something
like: Name of Custodian, acting as a custodian for Name of Child.
7. Make
a will. The biggest decision with a will: naming a guardian
who would raise your child if you and your spouse weren't around.
If your child is to inherit any assets (your home, insurance or
retirement accounts), you might also appoint a trustee (if you create
a trust) or financial custodian.
These are two different sets of skills, so it would
very likely not be the same person, says Miller. One "would
be handling the personal and health-care needs of the child,"
she says. The other "would be handling the financial aspects
of the child."
8. Get
a copy of your credit report. "Find out what your credit
looks like right now," says Miller. "Pay off as much debt
as possible so that you're going into this with the least debt possible."
9. Open
a college account. An education account can be a great place
to stash the money that parents and grandparents want to give the
little one for college some day. One smart pick: the
529 account.
"One of the nice things about the 529 plan is
that you can have owner and successor owner," says Miller.
"The owner controls the money. And the money grows tax-free
as long as it's used for education."
10. Be
flexible. You can't plan for everything, no matter how hard
you try. So sometimes your best planning tool is the ability to
make a new plan when the situation changes. One not-so-uncommon
example: Before the birth, the mom-to-be decides she either wants
to return to work or stay at home permanently. But after the birth
she changes her mind. Time to draft a new plan.
"Many people think, 'I'm going to do this
this way, and it will work,' and they don't take into account how
they will feel emotionally," Miller says. "You don't know
how you are going to feel about having a child until you have a
child."
Dana Dratch is a freelance writer
based in Atlanta.
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