Should You Plan for a Child Who Doesn’t Exist Yet?

The podcast discusses the importance of including future children in escape plans to protect their future. Waiting too long to update plans can lead to complications, as seen in the case of Heath Ledger. It's crucial to revisit and update estate plans regularly. Planning for future children should be done with simplicity and flexibility to avoid confusion. Naming guardians and handling funds for future children should be carefully considered. An estate plan should be clear, adaptable, and durable. It's wise to plan ahead and work with an estate planning attorney to ensure the protection of your legacy and loved ones. Regularly revisiting and updating your plan is essential. The podcast will explore what it means to prepare for life, death, and everything in between. Today's topic is one of those escape planning questions that sounds strange at first until you realize just how important it really is. Should you include a child that doesn't exist yet in your escape plan? Yes, you heard it right. I'm talking about unborn children, children you might have one day or even hope to adopt. This isn't science fiction, this is actually one of the more practical conversations we've had with clients who are just starting to build their families or simply want to think ahead. So let's get into it. Escape planning isn't just about legal documents, it's about imagining what your world could look like years from now. It's about having the courage and compassion to say, if something unexpected happens, here's what I want to see happen for the people I love. Now, if you're already a parent, then you probably know this instinct all too well. You think about guardianship, you think about how to secure your child's future, you make choices to protect them, even if you're not around. So what if you're not a parent yet? What if you might become one someday? What if you struggle with fertility and are considering adoption down the line? Should your escape plan be silent until the child arrives or should you carve out space for that possibility now? Well, let me give you a true story that highlights the danger of waiting too long. You may remember the actor Heath Ledger, his most famous role or one of his most famous roles was as a joker in The Dark Knight. When he died unexpectedly in 2008, he left, his will left everything to his parents and siblings. But by then, he had a daughter, Matilda, who wasn't even mentioned in the document. Thankfully, Ledger's family did the right thing. They gave the entire $16 million estate to Matilda. But imagine if they hadn't done that. Imagine if they had been tensioned or disagreement or if the court had to step in. Things could have gone very differently. And here's a key point. The only reason Matilda wasn't mentioned was because he never updated his plan. But that's not uncommon. In fact, a recent survey by caring.com found that since we came out of the COVID pandemic, the number of Americans with escape plans has decreased steadily and is now down to around 24%. That's roughly three out of four people walking around without any legal direction for what happens if they become incapacitated or if they die. Among those who do have an estate plan, nearly three quarters haven't updated since they created it. And those that do or have updated it wait 10 years or more between revisions. That's a long time when you're just living life. And it's an exceptionally long time when you're building a family. That's why it's important to remember that estate planning is not just a set and forget it task. Even if you made the right choice by including future children in your plan, it's essential to revisit those documents, ideally every three to five years or after a major life event. That's why at our firm, we offer our clients a complimentary peace of mind meeting every three to five years. Like best laid plans, we all know a lot can go sideways quickly and in a hurry. All right. Now, let's chat about the benefits of planning ahead, even if you're not expecting a child today. By including language in your estate plan that accounts for future children, you create a safety net. You make sure no child, biological or adopted, get unintentionally left out. You also get to name a guardian before a child is born. And that's key. Because of an emergency, a judge will want to know what your wishes were. If you said nothing, the court is left to guess. But if you've named someone, if you've spoken your values, it carries a lot of weight in the court's decision making process. So yes, you can and probably should plan for a child who doesn't yet exist. But you should also do so wisely. One of the biggest pitfalls I see is the temptation to go overboard. Parents sometimes want to spell out every contingency. Well, if I have twins, do this. If it's a boy, then do that. If I adopt and after I turn 40, here's what I want. That's all understandable and clients want to get it right. You want to get it right. But too many if this, then that clauses can lead to confusion and delay. And in worst case situations, many can lead to expensive court battles. So a better approach, simplicity and flexibility. Use inclusive language like all my children living and hereafter born or adopted. This phrase is elegant and effective. It ensures that any future child is treated equally without naming someone who doesn't exist yet. Now, if you're creating a trust, remember, you can handle funds for future children just as easily as you can for current ones. You can specify what distributions happen at certain ages or when milestones are met like graduating from college or starting a business. Or you can give the trustee discretion to make decisions based on the child's individual needs. That said, don't forget that no two children are the same. What works for one might not work for another. That's another reason why it's important to revisit your plan over time, especially as your family grows and changes. The same goes for naming guardians. You may want the same guardian for all your children. Maybe you don't. You can outline your preferences now and be ready to reassess them later. And one final word on guardianship, your nomination is not legally binding. A judge still has the final say. But your nomination is a powerful signal of intent and can tip the scales in a very close case. Now, you might be wondering, what if I go through all this trouble and never end up having children? That's a fair question. Here's what happens. If your estate plan names my children and you don't have any at your desk, then your backup beneficiaries, also called contingent beneficiaries, will inherit your estate. That might be a spouse, a sibling, a charity, a friend, other family members, or other loved ones. If you don't name anyone as a backup, then your estate may go through probate and state law will determine who inherits your assets. The good news is that a well-written plan handles both outcomes, whether you have children or not. And that's what we aim for in an estate plan, a structure that's clear, adaptable, and durable. So here's the bottom line. Planning for a child who doesn't exist yet isn't weird. It's actually very wise. It's very thoughtful. It's one of the clearest signs that you really considered what it means to protect your legacy and the people who might one day be part of it. But don't make it more complicated than it needs to be. Work with an estate planning attorney to craft documents that are flexible enough to evolve as your life does. And don't forget to revisit them every three to five years or after a major life event like we talked about, which is marriage, divorce, birth, or an adoption. Dust off those documents and see if they still reflect the values. The future is uncertain. We all know that. But your estate plan does not have to be. Thanks for listening to this episode of Living With Your Bags Packed. If you found this episode helpful, please do me a favor, share it with a friend, or better yet, talk to someone you care about and ask them if they've started their estate plan. If this episode sparked any thoughts, questions, or concerns, I encourage you to reach out, please. I'd love to be part of a conversation with you and your family. I'm Robert Newman, reminding you that peace of mind isn't just for someday, it's for today. Until next time, take care and plan well. Now here's my lawyer disclaimer, none of this is legal advice. Every situation is different and your estate plan should be tailored to your unique needs. So if you're not sure how to proceed or what makes sense for you, talk to a qualified estate planning attorney. Yes, even if it's not me. I'm Robert Newman. I'll see you next time.