Planning Ahead for Baby

Just as you take your prenatal vitamins, eat healthfully, and avoid smoking and alcohol, there are other things that expectant moms and dads must take care of before baby's arrival. It's time to start planning for baby's legal and financial security, experts tell WebMD.

"Now that you are bringing a newborn into this world, you must begin to get serious about your future and the future of your family, " says David P. Lesch, a lawyer at Lesch & Lesch PC in the Bronx, New York. "A little planning goes a long, long way," he says.

Such planning starts with a living will. "Say something happens during the birth, a living will ensures that your wishes are carried out," Lesch tells WebMD. "Having your wishes on a piece of paper protects you so that no one can say this isn't what you wanted."

Another option is a health care proxy which gives someone else the right to make medical decisions for you in the event that you cannot. "If have to have one, pick a living will, but if you don't want a living will, then a health care proxy is the next best option," says Lesch.

A living will takes effect only when a person can no longer express his or her wishes. It clearly states which medical treatments may be used and which may not be. By contrast, a health care proxy names the person whom you designate to make such decisions for you.

"The health care proxy is more flexible than the living will because it permits the designated individual to make decisions as specific situations arise," Lesch says. "The living will states the desired treatments and does not allow for events that were not predicted."

Having a legal will is important once you start a family, Lesch tells WebMD. "You can protect your own assets and pick someone to take care of your children if something happens," he says. Remember that "a person must be over 18 to be a guardian and take care of your child. Wait until your child is born healthy before you decide who should be the godparents or legal guardian."

"Depending on your assets," Lesch says, "you may want to create a trust that provides for college education and your child's future as well as name a trustee to dole out the money."

By definition, a trust is a legal arrangement in which an individual gives control of property to a person or institution for the benefit of beneficiaries in this case, your offspring.

For example, you can state 'I want my child to have XX amount of money by age 18 for education, then the rest by time he or she is 30," he says. This way the guardian knows what to do with your money. "If you don't have a lawyer, get a lawyer to do your living will before delivery and your regular will fairly quickly after the baby is born to protect your baby," he says.

"You really should be adding the baby to your health plan immediately upon birth because he or she will have a lot of medical expenses during the first year. You want to make sure that they are covered," Lesch says. Take a look at your policy before birth and determine what services are covered and how much the deductible is. Also, "any time you bring your child to a doctor, you yourself should document what the doctor is doing, which tests are taken, the results and when follow-up tests are needed," says Lesch, who has a great deal of experience in medical malpractice law. Speaking from personal and professional experience, Jared L. Gurfein, a New York city-based lawyer, cautions new parents to go over all medical bills with a fine-tooth comb.

"Often the hospital or the insurer (or both) will make an error that, if not checked, could result in large bills," he tells WebMD. "It is critical for parents to monitor the statements from both the medical provider and the insurer to see if any portion of the bills appear to be unpaid."

Also, he says, don't wait for the provider to send you a bill. "When you see your insurer has denied something that should be covered, immediately call the insurer and the administrator at the provider's office and bring it to their attention," he says.

"The worst thing to do is let the statements pile up and try to deal with it later. You can spend the rest of your baby's childhood fighting to get coverage you are rightfully owed," Gurfein says. His daughter, now healthy and thriving, was born prematurely and spent time in the neonatal intensive care unit (NICU).

"We had the experience of several statements from Oxford reflecting charges that were being denied that should have been covered my wife immediately called Oxford and the hospital each and every time we saw a denial and each time it turned out to be an error that was corrected," he says. "It has given us a great deal of peace of mind that we don't expect to be hit with any significant charges. Our baby's stay in the NICU likely exceeded a cost of $400,000!"

Sure college may seem like a long way away, but now is the time to start saving for your child's education, says Stephen Taft, a New York City-based certified financial planner.

"People like to open up college savings accounts and what form they take depends on the family,' he tells WebMD. Some families prefer the United Gift to Minors Account (UGMA), "but depending on the state, the child has complete access to the money by age 18 or 21. So others families find it worth it to establish a trust where access to money can be controlled," he explains. Also popular is the 529, he says. A 529 college savings plan allows you to set aside money for your child's education and let it grow tax-free. What's more, any family can contribute.

But the best thing any parent can do is "take care of their own finances," he says. "Make sure your own situation is taken care of because it adds stress to a household when it's not, he adds. For example, "credit card debt is very expensive debt to carry and if you can avoid it, you should."

Originally published July 25, 2005.

Medically updated May 2, 2006.

SOURCES: David P Lesch, a lawyer at Lesch & Lesch PC in the Bronx, New York; Jared L. Gurfein, a New York city-based lawyer and Stephen Taft, a New York City-based certified financial planner.