Create custom entity for my child

I want to create a custom entity that act like “person” but just with other values.
if my entity is ‘home’ or ‘work’
I want my child we be ‘awake’ or ‘sleep’ depend on a sensor I have (Owlet)
the sensor state - is sleep light, deep etc (I want to categorize it just as sleep) and ‘awake’ as 'awake.

how ca I achieve it

A possible way - creating a template sensor.
Assume “sensor.owlet” is a sensor provided by Owlet.
Could be smth like:

template:
  - sensor:
      - name: baby_sleep
        icon: ...
        state: >-
          {% if states('sensor.owlet') is search('sleep') -%}
            sleep
          {%- else -%}
            awake
          {%- endif %}
        availability: >-
          {{ has_value('sensor.owlet') }}

Based on your description that the sensor can have states like “sleep light”, “sleep deep”.

thanks a lot!
I trying to create it via the template helper but I get error
to be more specific: the senser.owlet get 4 values : deep, rem, light and awake.
also when its not on, it means baby awake so I get ‘Unavailble’ from this sensor or on anther sensor ‘sensor.dock’ I get = “clear” it means also baby awake.

Unclear.
First you are saying that the entity can be “deep, rem, light and awake”, then - that it could be “on”.
Post a screenshot of this “sensor.owlet” entity from “Dev tools → States”.