If you’re thinking about starting a family, congratulations! This is an exciting time in your life. But before you take the plunge, there are a few legal matters you need to take care of first. So here are some laws you need to know before you start a family.
Get a Will
If you die without a will, your assets will be distributed according to your state’s intestacy laws. This means that your spouse and children may not end up with what you wanted them to have. There are main interstate laws regarding inheritance: community property and common law.
Community Property Law
This law can be found in nine states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin . Under this law, any assets you accrued while you were married belong to both spouses equally and will be distributed according to their wishes if they die without a will.
However, there are exceptions to the community property rule. For instance, if one spouse was given assets before the marriage, they will go to that spouse if they die without a will.
Common Law Rule
This law is in place in all states except Alaska, Iowa, and Louisiana. Under this law, any property you hold at your death belongs to whomever it lists as the beneficiary. In most cases, each spouse’s assets are put into a trust which will be distributed according to their wishes.
To avoid these two laws, it’s essential to create a will as soon as possible. If you already have a choice, ensure it’s up to date—you may need to make changes after having children. For example, you’ll want to name a guardian for your minor children in your will.
Get Life Insurance
Life insurance is essential for any parent. If something happened to you, it would be crucial for your spouse and children to have the financial resources they need to get by without you. So make sure you have enough life insurance to cover at least 5-10 years’ worth of living expenses for your family.
Create or Update Your Powers of Attorney
A power of attorney (POA) allows someone else to make financial and legal decisions on your behalf if you’re incapacitated or unable to do so yourself. This is an essential document for anyone, but it’s vital for parents because if something happens to you, your spouse may need the ability to make decisions on your behalf regarding your children.
There are two types of POAs —a financial POA and a healthcare POA. A financial POA gives someone else the ability to handle your finances if you’re unable to do so yourself. A healthcare POA allows someone else to make medical decisions on your behalf if you’re unable or unwilling to do so yourself.
You can name the same person as both your financial and healthcare POAs , or you can name two different people. It’s entirely up to you. Just make sure that whoever you choose is responsible and trustworthy—you’re giving them a lot of power!
Consider Prenuptial or Postnuptial Agreements
If you’re married or planning on getting married, you may want to consider signing a prenuptial or postnuptial agreement (also known as a prenup or postnup ). A prenup is an agreement signed before marriage that outlines how marital property will be divided in the event of divorce or death. A postnup is similar but is signed after marriage instead of before.
Prenups and postnups are not just for wealthy couples—anyone can benefit from having one in place. For example, if you have significant assets or debt, if one spouse owns a business, or if there is a large discrepancy in earnings between spouses, a prenup or postnup can provide much-needed clarity and protection in the event of divorce or death.
Of course, no one likes to think about these things happening—but it’s always better to be prepared just in case. If you want to set these agreements, visit your local family lawyer . The lawyer can determine the type of agreement most appropriate for you and help you create an enforceable document.
Family Tax Laws
Lastly, parents should be aware of family tax laws. These laws apply to dependents, including children and other grandparents who live with you. For example, certain exemptions and deductions are available for parents (and other relatives) who claim dependents on their taxes.
As a parent, it’s crucial to ensure your family has what they need in the event of tragedy or divorce. By taking the necessary steps now—like creating a will and purchasing life insurance—you can give yourself peace of mind that your loved ones will be taken care of if something happens to you.
