If you are a single parent, life for you right now probably couldn’t get any busier. You are likely being pulled between work, school activities, sports teams and the inevitable emergencies that fill the lives of single parents everywhere.
Being a single parent is a huge responsibility. You may have taken it on willingly or not but your children’s lives are now largely in your hands. So what would happen to them if something happened to you? Who would take care of them? Who would pay for their housing and food? Who would pay for their education? These are questions you need to get answered, and the best way to do that is through estate planning.
Having an estate plan that covers the care of your children in case you should die suddenly or even become incapacitated provides welcome peace of mind for the single parent. Here are the elements that can help you:
Will. A will lets you name the person responsible for your estate as well as who will inherit your assets. Most importantly is the legal vehicle you use to name a guardian for your children, without a will, the state will decide their fate.
Revocable Living Trust. There are so many benefits of a living trust for single parents. First, a trust enables you to still control your assets while you’re able, but if you die or become incapacitated, it transitions that decision-making authority immediately to the person you have named as your trustee (obviously someone you can trust and count on to do what you would have wanted). If your children are still minors or even young adults their inheritance can be handled for them until the time comes when they are capable (and you decide that time). Plus, if you have a trust, your estate doesn’t have to go through probate, which can be costly and time-consuming. Also probates are not the best idea if your children need to continue living in their home and having their expenses paid.
Durable Power of Attorney. As a single parent, you are likely the only signatory on your mortgage, your bank accounts, and other financial instruments. What would happen if you became incapacitated and there was no one to pay the mortgage or the bills? That is why it is important to have a durable power of attorney in place. When choosing your power of attorney, it should be someone you trust managing your financial affairs, while also make legal decisions on your behalf if you are unable to do so.
Advance Medical Directive. An advance medical directive gives you the legal power to have someone you select make your health care decisions in case you are not capable of doing so yourself.
Beneficiary Forms. Your life insurance policy, retirement accounts and brokerage accounts all require beneficiary designations. Those you designate to receive the assets in these accounts will only receive them if you execute the proper beneficiary forms! They cannot pass to your heirs via a will or trust. And minor children should never be named as beneficiaries as they are not legally able to own assets. Talk with one of our lawyers about strategies to leave these assets to your children without court intervention.