Apr 03

Estate Planning for New Parents in Texas

If you have been meaning to get your estate plan done for a while, having a child is the moment to actually do it.

That is not meant to be alarmist. The vast majority of new parents are going to be around for decades to watch their kids grow up. But estate planning is precisely about preparing for the things you cannot predict, and when a child enters the picture, the stakes change. The decisions you make — or do not make — in your estate plan now directly affect someone who cannot speak for themselves.

Here is what new parents in Texas need to address.

The Most Important Decision: Naming a Guardian

If you only do one thing after reading this post, make it this: name a guardian for your minor child in your will.

A guardian is the person who would raise your child if both parents died before the child turned 18. Without a guardian designation in your will, a court decides who that person is. Judges try to make the right call, but they do not know your family, your values, your preferences, or the specific dynamics that make one person a better fit than another.

A few things to think through when choosing a guardian:

Values and Parenting Philosophy

Who shares your approach to raising children? Think about education, religion, discipline, lifestyle, and the values you want your child to grow up with. This is not about finding someone perfect — it is about finding someone whose approach to parenting is close enough to yours that your child would be raised in a way you would recognize and approve of.

Practical Capacity

Does this person have the time, health, financial stability, and emotional bandwidth to take on a child? A beloved aunt who lives across the country and works 70-hour weeks may love your child deeply but may not be the most practical choice as a day-to-day guardian. Consider the reality of the role, not just the emotional connection.

Willingness

Have the conversation. Do not assume. Some people are deeply honored to be named as guardian and will feel strongly about accepting the responsibility. Others may feel overwhelmed by the idea or have circumstances that make it genuinely difficult. The person you are considering deserves the opportunity to say yes or no with full information.

A Backup

Name an alternate guardian in case your first choice is unable or unwilling to serve. Life circumstances change, and a designation without a backup can leave you in the same court-decided situation you were trying to avoid.

Note that the guardian and the manager of your child’s financial inheritance do not have to be the same person. Texas law allows you to separate the role of personal guardian — who raises the child — from the role of trustee — who manages the child’s money. Sometimes the best caregiver and the best financial manager are two different people.

What Happens to Your Assets If You Leave Them to a Minor

Here is something many new parents do not know: if you leave assets directly to a minor child in Texas, a court-supervised guardianship of the estate is typically required to manage that property until the child turns 18. At 18, the child receives the full amount outright — no conditions, no staged distributions.

For most families, having an 18-year-old receive a substantial sum of money all at once is not the plan. A trust gives you control over how and when your child accesses inherited funds. You can specify distributions for education, for reaching certain ages (25, 30), or for specific milestones. You can name a trustee you trust to manage the money with your child’s long-term interests in mind.

Even a relatively modest estate justifies a simple trust for minor children. The cost of setting one up is small compared to the protection and control it provides.

Powers of Attorney: Now More Important Than Ever

Before you had a child, a gap in your estate plan mainly affected you. Now it affects your child too.

A financial power of attorney — also called a statutory durable power of attorney in Texas — names someone to manage your financial affairs if you are incapacitated. Without one, your family may have to go to court to get authority to pay your bills, access your accounts, or manage your property. That process takes time and money that your family cannot afford when they are also caring for a newborn.

A medical power of attorney names someone to make healthcare decisions for you if you cannot make them yourself. Again, without one, the hospital defaults to a statutory priority list that may not match who you would actually choose.

Both documents are standard components of every estate plan at Hardie Alcozer. They take effect only if you need them and they cost relatively little to put in place. The peace of mind they provide is significant.

Updating Beneficiary Designations

Your will does not control everything. Life insurance policies, retirement accounts (401k, IRA), and bank accounts with payable-on-death designations all transfer based on the beneficiary designation on file with the institution — not based on your will.

After your child is born, review all of these:

• Life insurance policies — who is named as beneficiary?
• Employer-sponsored retirement plan (401k, 403b) — is your designated beneficiary still current?
• IRA accounts — same question
• Payable-on-death designations on bank accounts

Note: be cautious about naming a minor child directly as a beneficiary on a financial account or insurance policy. A minor cannot legally receive a large sum of money directly, which can create the same court-supervised guardianship situation described above. A better approach is to name your trust as the beneficiary, or to name a custodian under the Texas Uniform Transfers to Minors Act.

If You Are Not Married

Single parents face all of the same estate planning needs as married parents — and some additional ones. If the other biological parent is alive and has parental rights, they would typically have priority for custody of your child over any guardian you name. Your guardian designation controls only if neither biological parent is available.

If you are a single parent, having a current, legally valid will and clear powers of attorney is especially important. Your child should not have to navigate uncertainty about their care because your documents were never completed.

The Best Time to Do This Is Now

Estate planning is one of those things that feels more urgent in the abstract than it does on any given Tuesday. There is always something else going on. But the documents take less time than most people expect, and the process at Hardie Alcozer is designed to be approachable from start to finish.

You do not need a complex plan to get meaningful protection in place. For most new parents, a will with a guardian designation and a simple trust, along with financial and medical powers of attorney, covers the essentials. From there, your plan can grow as your family and your assets do.

Frequently Asked Questions

Do both parents need to be named in a guardian designation?

Only one parent needs to name a guardian in their will. If both parents have a will, both should include a guardian designation, and ideally they should agree on the same person. If the named guardians in each parent’s will are different, a court will ultimately decide — which is exactly the situation you are trying to avoid.

What happens to my existing estate plan after I have a child?

Your existing plan does not automatically update to include your new child. If you have a will, it needs to be reviewed to determine whether the new child is adequately addressed. Texas does have limited protections for pretermitted (omitted) children, but those defaults may not reflect your actual wishes. Updating your plan after a child is born is strongly recommended.

What age should I name in a trust for distributions to my children?

This is a personal decision, but many parents choose to stage distributions — for example, a portion at 25, a portion at 30, and the remainder at 35. The right answer depends on your family, your assets, and your judgment about your child’s financial readiness. Your estate planning attorney can walk you through common approaches and help you decide what fits your situation.

Should both parents get estate plans at the same time?

Yes. If one parent has a plan and the other does not, you have a gap. Hardie Alcozer frequently works with couples to complete their estate plans at the same time, which is often more efficient and ensures the plans are consistent with each other.