Estate planning for new parents? That’s right. Yes, you have a lot to do as a new parent. But before we get into that… Congratulations! You have done 2 amazing things:
You brought a wonderful child into your life… AND you planned for the future by creating and signing a will. Now that you have a child, though, you are wondering if you need to do a new will and what happens if you don’t. These are great questions.
Yes, you’ll want a new will
First, you should do a new will because it makes everything simpler. If you executed your first will prior to having any children, the new will might have more considerations for you to make, such as:
- What happens if your child was to inherit money before reaching a certain age (you pick the age) and how much he or she would receive.
- How you are going to pay for college or other post-secondary education and training, and obtaining financial assistance.
- Who should take care of your child if you were unable to before that child reaches adulthood. No one likes to think about this, and it is a major reason why many families do not complete their estate planning. However, it is important to take the time to make difficult choices. Doing so will bring you peace of mind that your child is provided for.
Estate planning for new parents: “Pretermitted children” and what happens if you don’t update your current will
Second, if you do not create a new will, Oregon has statutory procedures that will step in for children born, adopted, or conceived after execution of the will and not provided for or mentioned in the will, and surviving the testator (person making the will). When it comes to estate planning for new parents, the law considers these children “pretermitted children.” In Oregon, the following happens based upon the situation:
When an estate excludes a child from financial accounts
- If a testator has one or more children living when the testator executes a will and no provision is made in the will for the living children, a pretermitted child shall not take a share of the estate of the testator disposed of by the will.
For example: Fred has one living child, Greg, when he executes his will, but does not provide for Greg because Greg is the beneficiary of his financial accounts. A few years later, Fred has one more child, Hannah. He never amends his will to include Hannah or make reference that he has provided for Greg outside the will. After Fred passes, Hannah will not inherit from Fred and Greg will inherit the financial accounts outside of probate.
Provisions for pretermitted children
- If a testator has one or more children living when the testator executes a will and provision is made in the will for one or more of the living children, a pretermitted child is entitled to share in the estate of the testator disposed of by the will as follows:
- The pretermitted child may share only in the portion of the estate devised to the living children by the will.
- The share of each pretermitted child shall be the total value of the portion of the estate devised to the living children by the will divided by the number of pretermitted children plus the number of living children for whom provision, other than nominal provision, is made in the will.
- To the extent feasible, the interest of a pretermitted child in the estate is of the same character, whether equitable or legal, as the interest the testator gave to the living children by the will.
For example: Fred has one living child, Greg, when he executes his will and he provides that Greg is to receive one-half of his estate, the remainder to Anna, Fred’s wife and mother of Greg. A few years later, Fred and Anna have one more child, Hannah. He never amends his will to include Hannah. After Fred passes, Hannah and Greg will each receive 1/4 of the estate and Anna will receive the remaining 1/2 of the estate.
If you didn’t update your will to account for your children
- If a testator has no child living when the testator executes a will, a pretermitted child shall take a share of the estate as though the testator had died intestate, unless the will devised all or substantially all of the estate to the other parent of the pretermitted child and that other parent survives the testator and is entitled to take under the will.
For example: Fred has no children when he executes his will, providing the entire estate to Anna, his wife. Fred then has a child, Greg, in an affair with his physical therapist, Lyla. Paternity is established. Anna graciously forgives him and requires him to find a new physical therapist. A few years later, Fred and Anna have one child, Hannah. He never amends his will to include Greg or Hannah. After Fred passes, Greg would receive 1/2 of the estate (his intestate share) and Anna receives the remaining 1/2 of the estate. Hannah would not take under the will because the will devised all of the estate to her mother and Anna survived Fred.
Estate planning for new parents: When your family changes, turn to your Oregon estate planning attorney
As you can tell, life gets messy. The examples above are just a few of the situations that can happen. Therefore, when your family changes, it is best to revisit your estate plan. Consider consulting with a qualified attorney, and make sure your estate plan reflects what you want.