For the most part, children within a family in California follow a fairly tight age spread, no more than 48 months separating each child. However, sometimes an unexpected child can enter the picture, often much younger than their siblings and while you as parents are at a later stage in life.
While a new baby is always a source of joy, it’s important to consider the estate planning consequences of an unexpected child.
Considering guardian status
Many couples with older children (at least age eight or nine up to teenagers) have provisions in their wills making their parents the guardians of the children in the event that it becomes necessary. And frequently, this is a suitable arrangement.
Parenting older children is a task many grandparents are up for, as older children have more autonomy and require less all-encompassing childcare. But a baby, infant or young child is an altogether different proposition.
Babies and young children require near-constant care, and are often more physically demanding than grandparents might be able to handle. Consider an older, adult sibling, younger relative or close family friend as a guardian for your baby or young child.
Financial considerations
Most wills make accommodations for the possibility of future children, so you may not need to update your will. But other financial instruments, such as life insurance policies, make no such distinction. If you don’t adjust the relevant policies, your new child might be without financial support if you die.
The simplest way to divide your estate among children is to give each child an equal portion. But this sometimes get complicated when one of your children is much younger than the others.
In that scenario, the older children might have received significant financial benefits (such as college tuition) that the younger child hasn’t yet needed. A pot trust is a pooled collection of your assets administered by a trustee, where the trustee is given leeway to divide those assets as they see fit.
An unexpected baby, particularly one born to older parents, can present certain challenges for estate planning. It’s important to take some time to consider their impact on your long-term life and estate planning.