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Family Finances: What to Expect

Financial Planning

Deciding to have a baby is a special time in a couple’s relationship. It gives the two of you the opportunity to recommit to one another, talk about values and beliefs, and paint a picture of the future you wish to create together. As these conversations evolve, here are a few questions to consider.

The Timing

  • How will your careers change with a baby? Have you considered a cash flow scenario if your spouse does not go back to work?
  • Do you require any changes to your living situation to accommodate a baby (e.g., bigger house or car)?
  • Does your current form of health insurance cover prenatal care, labor and delivery? Would an HMO or PPO plan serve your needs better?
  • How can you add the baby to your health insurance plan?
  • What are your child-care options?
  • What maternity/paternity benefits are you entitled to take?

What to do for today?

  • What can you reasonably expect to pay for conception/adoption costs?
  • Have you maximized the Health Savings Accounts or Flexible Spending Accounts available to you?
  • Are you eligible for the Child and Dependent Care Tax Credit?
  • Have you budgeted for an uptick in household expenses? (e.g.,  the average middle-income family with two children will spend $310,605 to raise a child born in 2015 up to age 17).*

What do you do for the future?

  • Do you anticipate sending your child to public or private school?
  • When will you establish a 529 plan or otherwise begin saving for your child’s college education?
  • Do you have enough and the right type of life insurance coverage? Should you own the insurance in your own name or have a Life Insurance Trust own the policy?
  • Can you add a child as a beneficiary on your existing life insurance policies?
  • Have you updated your Will, Durable Power of Attorney and/or Health Care Proxy?
  • Should you have a Trust created for the benefit of the child?
  • Who will be the guardian of your child?
  • Do you want guardians of your children to also serve as fiduciaries of your estate?
  • Have you considered establishing a Family Legacy Trust? In other words, do you want a structure in place for your children to help educate and embrace your family’s values?

You don’t have to know all of the answers to these questions; you just have to know where to turn for help. Lenox Advisors has the background, experience and extensive network to guide you and your family past potential pitfalls while identifying unique opportunities. No matter what strategies or financial instruments we recommend, they will be part of a larger financial plan — one that you lead, based on your goals and your situation.

*https://www.investopedia.com/articles/personal-finance/090415/cost-raising-child-america.asp

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