Estate Planning for New Parents in Pennsylvania

Estate planning is not something most people associate with the first year of parenthood. New parents in Pennsylvania are, quite reasonably, focused on sleep and pediatrician appointments. But three things happen the moment a child is born that make an estate plan meaningful in a way it may not have been before:

1. You are now legally responsible for another human being.
2. You have opinions — often strong ones — about who should raise your child if you cannot.
3. Anything you leave to a minor child in Pennsylvania cannot pass to them directly.

This article walks through what a first estate plan looks like for a Pennsylvania family with young children. Every family is different; the fastest way to a plan built for yours is to schedule a free consultation.

Name a guardian in your will — not just in a conversation

The single most important reason a new parent needs a will is guardianship. Under 20 Pa.C.S. § 2519, a Pennsylvania parent may nominate a guardian for a minor child in a will. If both parents die without doing so, the Cumberland, Dauphin, York, Lancaster, or whichever county Orphans' Court decides who raises the child, based on the best-interests standard and whoever files a petition. That decision may or may not match what the parents would have wanted.

Practical guardian-nomination considerations:

• Name a primary and a successor. If the primary is unable or unwilling, the court still has your named backup.
• Consider whether the guardian of the person and the guardian of the estate should be the same individual. It is common to name a warm-hearted relative as guardian of the person and a financially cautious sibling as guardian of the estate.
• Talk to the people you are naming. A named guardian who first hears about the appointment in Orphans' Court is a difficult starting point.

Don't leave money to a child outright

Pennsylvania will not let a minor take control of an inheritance. If a child under 18 is a direct beneficiary of a life insurance policy, a retirement account, or a will, the funds have to be held for them — and the default option, a guardianship of the estate through Orphans' Court, is public, supervised, and expensive.

Better options in a Pennsylvania plan:

• A testamentary trust in the will. The will creates a trust for each child, names a trustee, and lets you set the age (often 25 or 30) at which the child receives assets outright. See our Pennsylvania testamentary trust overview for structure.
• A revocable living trust with child sub-trusts. If the family already has a revocable living trust, the same trust holds inheritances for each child until an age you choose.
• Pennsylvania Uniform Transfers to Minors Act (PUTMA) accounts. For smaller amounts, a custodial account under 20 Pa.C.S. § 5301 is simpler than a trust — but the child gets the money outright at 21.

Update your beneficiary designations too. A life insurance policy paying "to my minor children" bypasses the will and lands in an Orphans' Court guardianship. Naming the trust as beneficiary — or naming a custodian under PUTMA — solves the problem.

Powers of attorney and healthcare directives for the parents

The parents' own durable financial power of attorney and advance healthcare directive matter even more once children are in the picture. If one spouse is hospitalized, the other spouse does not automatically have full authority over accounts held solely in the incapacitated spouse's name. A current POA and healthcare directive keep the family functioning during a crisis.

Life insurance is the funding source

A young couple with a modest estate can leave the child a meaningful inheritance only through life insurance. Term life is inexpensive at typical new-parent ages, and Pennsylvania inheritance tax does not apply to life insurance paid to a named beneficiary. Coordinate the beneficiary with the trust the will creates so the proceeds land in a protective structure, not in Orphans' Court.

What a first plan usually looks like

For most new parents in Pennsylvania, a starter plan is:

• Wills for both parents naming guardians and creating a trust for the children;
• Coordinated beneficiary designations on life insurance and retirement accounts;
• Durable financial powers of attorney for both parents;
• Advance healthcare directives for both parents;
• HIPAA authorizations.

For families with real estate, business interests, or blended-family dynamics, a revocable living trust is added to the base plan. For a broader look at what happens without any planning, see our Pennsylvania wills guide.

Ready to put a plan in place?

Our office in Camp Hill works with new parents from Cumberland, Dauphin, York, Lancaster, and the surrounding counties. Consultations are free and can be handled by video for families juggling a newborn's schedule. Call (717) 724-7503 or schedule a free consultation.