diff --git a/frontend/menus/DocumentMenu.js b/frontend/menus/DocumentMenu.js
index 11ed5775..e60933f8 100644
--- a/frontend/menus/DocumentMenu.js
+++ b/frontend/menus/DocumentMenu.js
@@ -16,8 +16,11 @@ import { DropdownMenu, DropdownMenuItem } from 'components/DropdownMenu';
     document: Document,
   };
 
-  onCreateDocument = () => {
-    this.props.history.push(`${this.props.document.collection.url}/new`);
+  handleNewChild = () => {
+    const { history, document } = this.props;
+    history.push(
+      `${document.collection.url}/new?parentDocument=${document.id}`
+    );
   };
 
   handleDelete = () => {
@@ -52,7 +55,12 @@ import { DropdownMenu, DropdownMenuItem } from 'components/DropdownMenu';
               Unstar
             </DropdownMenuItem>
           : <DropdownMenuItem onClick={this.handleStar}>Star</DropdownMenuItem>}
-
+        <DropdownMenuItem
+          onClick={this.handleNewChild}
+          title="Create a new child document for the current document"
+        >
+          New child
+        </DropdownMenuItem>
         <DropdownMenuItem onClick={this.handleMove}>Move</DropdownMenuItem>
         <DropdownMenuItem onClick={this.handleExport}>Export</DropdownMenuItem>
         {allowDelete &&
diff --git a/frontend/models/Document.js b/frontend/models/Document.js
index e13df65f..4f4c760e 100644
--- a/frontend/models/Document.js
+++ b/frontend/models/Document.js
@@ -97,7 +97,7 @@ class Document extends BaseModel {
 
   @computed get parentDocumentId(): ?string {
     return this.pathToDocument.length > 1
-      ? this.pathToDocument[this.pathToDocument.length - 1].id
+      ? this.pathToDocument[this.pathToDocument.length - 2].id
       : null;
   }
 
@@ -175,7 +175,6 @@ class Document extends BaseModel {
         if (this.parentDocument) {
           data.parentDocument = this.parentDocument;
         }
-        debugger;
         res = await client.post('/documents.create', data);
       }
       runInAction('Document#save', () => {
diff --git a/package.json b/package.json
index bd9d3faa..5af1067d 100644
--- a/package.json
+++ b/package.json
@@ -4,11 +4,14 @@
   "main": "index.js",
   "scripts": {
     "clean": "rimraf dist",
-    "build:webpack": "NODE_ENV=production webpack --config webpack.config.prod.js",
-    "build:analyze": "NODE_ENV=production webpack --config webpack.config.prod.js --json | webpack-bundle-size-analyzer",
+    "build:webpack":
+      "NODE_ENV=production webpack --config webpack.config.prod.js",
+    "build:analyze":
+      "NODE_ENV=production webpack --config webpack.config.prod.js --json | webpack-bundle-size-analyzer",
     "build": "npm run clean && npm run build:webpack",
     "start": "node index.js",
-    "dev": "NODE_ENV=development DEBUG=sql,cache,presenters ./node_modules/.bin/nodemon --watch server index.js",
+    "dev":
+      "NODE_ENV=development DEBUG=sql,cache,presenters ./node_modules/.bin/nodemon --inspect --watch server index.js",
     "lint": "npm run lint:flow && npm run lint:js",
     "lint:js": "eslint frontend",
     "lint:flow": "flow",
@@ -18,39 +21,24 @@
     "sequelize:migrate": "sequelize db:migrate",
     "test": "npm run test:frontend && npm run test:server",
     "test:frontend": "jest",
-    "test:server": "jest --config=server/.jestconfig.json --runInBand --forceExit",
+    "test:server":
+      "jest --config=server/.jestconfig.json --runInBand --forceExit",
     "precommit": "lint-staged"
   },
   "lint-staged": {
-    "*.js": [
-      "eslint --fix",
-      "git add"
-    ]
+    "*.js": ["eslint --fix", "git add"]
   },
   "jest": {
     "verbose": false,
-    "roots": [
-      "frontend"
-    ],
+    "roots": ["frontend"],
     "moduleNameMapper": {
       "^.*[.](s?css|css)$": "<rootDir>/__mocks__/styleMock.js",
       "^.*[.](gif|ttf|eot|svg)$": "<rootDir>/__test__/fileMock.js"
     },
-    "moduleFileExtensions": [
-      "js",
-      "jsx",
-      "json"
-    ],
-    "moduleDirectories": [
-      "node_modules"
-    ],
-    "modulePaths": [
-      "frontend"
-    ],
-    "setupFiles": [
-      "<rootDir>/setupJest.js",
-      "<rootDir>/__mocks__/window.js"
-    ]
+    "moduleFileExtensions": ["js", "jsx", "json"],
+    "moduleDirectories": ["node_modules"],
+    "modulePaths": ["frontend"],
+    "setupFiles": ["<rootDir>/setupJest.js", "<rootDir>/__mocks__/window.js"]
   },
   "engines": {
     "node": ">= 7.6"
@@ -169,7 +157,8 @@
     "string-hash": "^1.1.0",
     "style-loader": "^0.18.2",
     "styled-components": "^2.0.0",
-    "truncate-html": "https://github.com/jorilallo/truncate-html/tarball/master",
+    "truncate-html":
+      "https://github.com/jorilallo/truncate-html/tarball/master",
     "url-loader": "0.5.7",
     "uuid": "2.0.2",
     "validator": "5.2.0",
diff --git a/server/api/documents.test.js b/server/api/documents.test.js
index 67cf4488..8f1b7c58 100644
--- a/server/api/documents.test.js
+++ b/server/api/documents.test.js
@@ -3,6 +3,7 @@ import TestServer from 'fetch-test-server';
 import app from '..';
 import { View, Star } from '../models';
 import { flushdb, seed } from '../test/support';
+import Document from '../models/Document';
 
 const server = new TestServer(app.callback());
 
@@ -194,6 +195,49 @@ describe('#documents.unstar', async () => {
   });
 });
 
+describe('#documents.create', async () => {
+  it('should create as a new document', async () => {
+    const { user, collection } = await seed();
+    const res = await server.post('/api/documents.create', {
+      body: {
+        token: user.getJwtToken(),
+        collection: collection.id,
+        title: 'new document',
+        text: 'hello',
+      },
+    });
+    const body = await res.json();
+    const newDocument = await Document.findOne({
+      where: {
+        id: body.data.id,
+      },
+    });
+
+    expect(res.status).toEqual(200);
+    expect(newDocument.parentDocumentId).toBe(null);
+    expect(newDocument.collection.id).toBe(collection.id);
+  });
+
+  it('should create as a child', async () => {
+    const { user, document, collection } = await seed();
+    const res = await server.post('/api/documents.create', {
+      body: {
+        token: user.getJwtToken(),
+        collection: collection.id,
+        title: 'new document',
+        text: 'hello',
+        parentDocument: document.id,
+      },
+    });
+    const body = await res.json();
+
+    expect(res.status).toEqual(200);
+    expect(body.data.title).toBe('new document');
+    expect(body.data.collection.documents.length).toBe(2);
+    expect(body.data.collection.documents[1].children[0].id).toBe(body.data.id);
+  });
+});
+
 describe('#documents.update', async () => {
   it('should update document details in the root', async () => {
     const { user, document } = await seed();
diff --git a/server/models/Collection.js b/server/models/Collection.js
index 45a36a77..7e2d29c2 100644
--- a/server/models/Collection.js
+++ b/server/models/Collection.js
@@ -133,16 +133,23 @@ Collection.prototype.addDocumentToStructure = async function(document, index) {
     // Sequelize doesn't seem to set the value with splice on JSONB field
     this.documentStructure = this.documentStructure;
   } else {
-    this.documentStructure = this.documentStructure.map(childDocument => {
-      if (document.parentDocumentId === childDocument.id) {
-        childDocument.children.splice(
-          index || childDocument.children.length,
-          0,
-          document.toJSON()
-        );
-      }
-      return childDocument;
-    });
+    // Recursively place document
+    const placeDocument = documentList => {
+      return documentList.map(childDocument => {
+        if (document.parentDocumentId === childDocument.id) {
+          childDocument.children.splice(
+            index || childDocument.children.length,
+            0,
+            document.toJSON()
+          );
+        } else {
+          childDocument.children = placeDocument(childDocument.children);
+        }
+
+        return childDocument;
+      });
+    };
+    this.documentStructure = placeDocument(this.documentStructure);
   }
 
   await this.save();