Planning for a Young Family

Your checklist

The young-family planning checklist

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Build an emergency fundMany families aim for three to six months of essential expenses.
Make a will that names a guardianAnd a backup guardian. See below.
Review life insurance for both parentsIncluding a stay-at-home parent, whose work would cost money to replace.
Check your disability coverageWhat would actually pay if you couldn't work for a year?
Update beneficiary formsLife insurance, 401(k)s and IRAs. Don't name a minor child directly.
Sign a health care directive and power of attorneySo your partner can act for you if you're hurt or ill.
Consider a living trustEspecially if you own a home. It can avoid probate and hold money for the kids.
Open a 529 or other education savingsEven small, automatic contributions add up over 18 years.
Use the dependent care FSAIf your employer offers one, during open enrollment.

Part 1

Naming a guardian

California lets parents nominate a guardian for their minor children in a will or another signed writing.¹ If both parents die without one, a judge decides who raises the children, possibly someone you wouldn't have chosen.

Name a backup in case your first choice can't serve.
Separate the roles if it helps. The person who raises your kids doesn't have to be the one who manages their money. A trust can name a different trustee.
Talk to them first. Make sure they're willing, and revisit the choice as life changes.

Part 2

Protecting your income

Life insurance

The question to answer is: if one of you died, how much money would the family need, and for how long? Families often add up years of income to replace, the mortgage and other debts, childcare, and future college costs, then subtract savings and existing coverage.

Term insuranceCovers a set period, like 20 or 30 years, usually at the lowest cost per dollar of coverage.

Permanent insuranceLasts for life and can build cash value, but costs more. Fits some long-term goals, not every budget.

Disability insurance

During your working years, you're more likely to be unable to work for a long stretch than to die. Check what your employer plan and California SDI would really pay. See Disability Insurance for High Earners.

Part 3

Kids as beneficiaries

A minor generally can't take control of money directly. If a life insurance policy or IRA names your 3-year-old, a court may have to appoint someone to manage it, and your child could receive it outright as a young adult.

Common alternatives are naming your living trust as beneficiary, or naming a custodian under California's Uniform Transfers to Minors Act, which lets you set the age when the child takes control, between 18 and 25 in many cases.²

Part 4

Saving and tax breaks for families

Item	What to know
529 plan (California's is ScholarShare 529)	Growth is tax-free when used for qualified education. Starting in 2026, up to $20,000 a year can go to K-12 expenses.⁴ California doesn't give a state tax deduction for contributions.⁵
Child tax credit	$2,200 per qualifying child under 17, adjusted for inflation after 2025, with phase-outs at higher incomes.³
Dependent care FSA	Up to $7,500 a household, pre-tax, for childcare starting in 2026.⁴
Gifts from grandparents	Each grandparent can give $19,000 per grandchild in 2026 without using their lifetime exclusion, including into a 529.³

Buying a first home is often the next big step. Try the Home Buying Calculator.

Just started a family, or about to?

A conversation can turn this checklist into a plan in the right order for your budget, and point you to an estate planning attorney for the documents.

Book a time with Kevin Educational only. Wills, trusts and guardianship nominations should be prepared by a licensed California attorney.

Sources

California Probate Code §1500 and §1502 (nomination of guardian by parent). Accessed November 10, 2026.
California Uniform Transfers to Minors Act, Probate Code §3920.5 and related sections beginning at §3900. Accessed November 10, 2026.
IRS, "IRS releases tax inflation adjustments for tax year 2026" (child tax credit, annual gift exclusion). Accessed November 10, 2026.
Public Law 119-21 (the 2025 budget reconciliation act), sections on 529 K-12 expenses and dependent care assistance, H.R. 1 on Congress.gov. Accessed November 10, 2026.
ScholarShare 529, California's 529 college savings plan, and California Franchise Tax Board guidance on 529 plans. Accessed November 10, 2026.