Having a child
Growing your family can be one of the most rewarding experiences of your life. To ensure your family’s best financial future, make sure you know the legal, financial, and tax responsibilities and opportunities that can apply to families.
Growing your family can be one of the most rewarding experiences of your life. To ensure your family’s best financial future, make sure you know the legal, financial, and tax responsibilities and opportunities that can apply to families.
What you need to know
Key steps to consider, what to watch out for, and ways advisory firms can help to set up your family with a financial strategy that aligns with your values.
1. Plan for expenses
Medical expenses, additional insurance coverage, initial nesting costs, and any planned education costs will require an adjustment to your budget.
2. Adjust investment strategy
With a growing family, your short-and long-term financial goals will change, and your asset allocation should be adjusted accordingly to account for college savings, childcare costs, moving, and insurance.
3. Create a disaster plan
You will want your family to be protected even in case of unforeseen events. For peace of mind, a will and/or trust, life insurance, disability income insurance, and a plan for major medical expenses should be considered.
Common Mistakes
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budgetingSpending outside of your budget
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Insurance
Missing out on insurance savings
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tax deductions
Missing out on additional tax deductions from dependents
What services should I consider?
Growing your family is rewarding and keeps you busy. Get help from professional tax advisors and financial planners to put your family on the auto-pilot path towards your best financial future.
First: Tax Planning
Tax strategy
Maximize new child tax credits, potential state tax deductions for a portion of your 529 contributions, and federal tax deductions for qualified medical expenses beyond the AGI threshold.
Bump savings: Tax-optimization
Leverage tax optimized accounts to help save for education costs.
Next: Wealth management
Holistic financial planning
During a happy but busy time, have an objective third party help decide what makes the most financial sense in terms of lifestyle spending and long-term saving/spending tradeoffs.
Other upcoming events
An experienced financial adviser will have worked with many families over the course of decades, and can flag potential issues and opportunities as you plan any moves, home purchases, job changes, and/or continuing to grow your family.
Plan for future: Estate Planning
Create a trust
If you plan to gift or transfer assets upon your death, consider setting up a trust. Trusts can be particularly useful if you have children from a former marriage, have a special needs child, and/or you have assets with a low cost-basis (like a business) that are likely to appreciate significantly over time.
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