If you are a single parent, life for you right now is likely extremely busy. You are being pulled between work, school activities, and home – and the inevitable emergencies that fill the lives of single parents everywhere.
Being a single parent is a huge responsibility, even if you do share time with a parenting partner and especially so if you do not. Regardless, as a single parent, your children’s lives are 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 important questions that you want answered before anything happens, and the best way to do that is through thoughtful estate planning.
Having an estate plan that covers the care of your children in case you should be in a severe accident, fall ill, or die prematurely welcomes peace of mind for the single parent knowing everything and everyone they love is taken care of. Here are the must-haves that can protect your children if something were to ever happen to you:
A will lets you name the person responsible for your estate and belongings. In addition, it spells out who will inherit your assets. Most importantly, this is one of the legal vehicles that you can use to name a guardian for your minor children. Without a will or some other legal document to state who takes care of your children when you are unable or unavailable to do so, the state will be forced to make that decision. The greatest risk you leave behind when ignoring this piece of your estate plan is that your children could possibly be taken into the care of strangers or people whom you would never have chosen to raise them.
Revocable Living Trust
There are so many benefits of a living trust for single parents. First, a trust enables you to still control your money and property while you are able. If you die or become incapacitated, it transitions that decision-making authority immediately to the person you have named as your successor 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 does not have to go through the costly and time consuming process of probate. Without a trust, you risk draining your hard-earned money on probate costs. This is not ideal if your children need the assets to continue maintain their standard of living.
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 durable power of attorney, it should be someone you trust managing your financial affairs and making legal decisions on your behalf if you are unable to do so.
Advance Medical Directive
An advanced medical directive gives legal power to the person you choose to make your health care decisions in case you are incapable of doing so yourself. This is especially important if your children are too young to make these kinds of decisions, you live a great distance from your closest family and friends, and you have not remarried.
Your life insurance policy, retirement accounts, and brokerage accounts should all have beneficiary designations on file with your financial institutions. Those you designate to receive the assets in these accounts will receive the funds outside of probate if you execute the proper beneficiary forms. Alternatively, if you have a trust-based plan, you can designate the trust as the beneficiary (still effectively keeping the assets outside of probate).
As a practice, minor children should never be named as beneficiaries since they are legally unable to own assets until they reach the age of majority in your state. If you do name a minor as the beneficiary of an account and you pass away prior to them reaching the age of majority in your state, their assets will have to be managed by a guardian (likely chosen by the court). However, if you have a trust, your designated successor trustee can step in and manage the funds. Talk with us today about strategies to leave these assets to your children without court intervention.
Kids Protection Planning Kit®
Developed by a nationally recognized attorney who is a single mom herself, the Kids Protection Planning Kit® provides single parents with the legal planning tools they need to make sure there is never a question about who will take care of your kids if you are in an accident. The kit includes legal documents to name short- and long-term guardians, instructions for those guardians, medical powers of attorney for your minor children, and more.
You can name your guardians right now with my Kids Protection Plan Tool, It only takes minutes, and it’s absolutely free.
One of the main goals of our law practice is to help families like yours plan for the protection of yourself and your family through thoughtful estate planning. Call our office or schedule online today to schedule your Family Wealth Planning Session™ for us to review how to protect what matters most, during this time together we can identify the best strategies for you and your family.
This article is a service of Reflections Life Planning LLC, Personal Family Lawyer®. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.