Updating your will after having children
A new child changes more than your sleep schedule. Here's what to add to your will – guardianship, testamentary trusts, and substitute beneficiaries.
A new baby should trigger a will update within months. Guardianship appointments, testamentary trust provisions for minors, and adjustments to beneficiary shares are all typically needed.
Guardianship appointment
Parents can nominate a guardian in the will for minor children – the person who would care for the children if both parents died. Without a nomination, the court decides, which is stressful and unpredictable for the family.
Consider who has the emotional, financial, and practical capacity. Often a sibling or close friend. Have the conversation with them first – a guardian who hasn't agreed can decline.
Testamentary trusts for minor beneficiaries
Direct gifts to a minor can't be managed by the minor themselves. Without a testamentary trust, a public trustee or court-appointed guardian manages the funds until the child turns 18 – usually with conservative investments and administrative fees that eat returns.
A testamentary trust lets you appoint a trustee (often a surviving spouse) to manage the inheritance until a later age – 21, 25, 30 – with distributions for education, health, and advancement in the meantime. Income distributions to minors through testamentary trusts are taxed at adult rates, not penalty rates.
Beneficiary shares
If your existing will provided for specific people and didn't anticipate children, the shares probably need adjustment. New children should typically receive equal shares to existing siblings, with appropriate provisions for step-children where relevant.
Substitute clauses
If a child dies before you, without substitute provisions the gift usually passes to the child's estate. Most parents prefer gifts to go to the child's children (grandchildren) if the child predeceases. This needs to be explicit.
Superannuation and insurance
Life insurance and superannuation often form the largest portion of a young family's wealth. Binding death benefit nominations need to align with the will. Trust structures for life insurance payouts can protect minor children similarly to testamentary trusts.
Timing
Ideally, the will is updated in the first few months after a new child arrives. Life gets busy – but an out-of-date will exposes the family exactly when it's most vulnerable.
Summary
A new child changes the estate plan substantially. Guardianship, testamentary trusts, revised beneficiaries, substitute clauses, and super alignment are all typical. Sam can coordinate a post-birth will update in 2-3 weeks.
Talk to Sam about your situation
If this article raised questions for your own circumstances, Sam Michele offers free 20-minute initial consultations. Learn more about our wills service, or book a consultation.
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Disclaimer: This article is general information only and does not constitute legal advice. Estate planning is deeply personal - every family's circumstances are different. For advice specific to your situation, please contact Rosewood Succession Solicitors.