As a single parent, you will probably have unique estate planning needs that differ from those of married parents. Without a spouse to rely on, it's critical to have a solid estate plan in place to ensure that your children are taken care of in the event of your death or incapacitation. In this article we will provide our top three strategies and tools for single parent estate planning.
1. Name a Guardian for Your Children
Naming a guardian for your children is probably the most crucial consideration of your estate plan. If you fail to appoint or name a guardian for your children, a court will be left with making the decision of who will take care your children in the event you pass away or become incapacitated. As a parent, you may want to consider selecting a caregiver you can rely on to instill in your kids the same principles you do. Some helpful tips to consider when appointing a guardian would include the potential guardian’s age, their financial security, and their relationship with your children. You may want to also consider selecting or designating an alternate guardian in case your initial appointee is unable to carry out their responsibilities.
2. Establish a Trust
As a parent who wishes to ensure that their children financial security in the event of their passing or incapacitation, you may find comfort and peace of mind in establishing a trust for the benefit of your children. Establishing a trust allows you to decide how your assets will be divided and managed for the benefit of your children in your absence. It would be wise to consider a variety of factors when establishing a trust for your children, nonetheless, the most important consideration should be the age at which your children will inherit. If your desire is to ensure your children are taken care of for a long time, determining when they receive their distributions is crucial. We recommend that you consider staggering the distributions so that your children receive their shares at particular ages or milestones, such as graduating college. As an added measure of security for your children's inheritance, a trust can shield your assets from litigation and creditors.
3. Draft a Comprehensive Estate Plan
For all parents, but especially for single parents, a comprehensive estate plan is essential. Your estate plan should contain a will, powers of attorney, and healthcare directives in addition to appointing a guardian and creating a trust. A will specifies your desired asset distribution and appoints an executor to carry out your instructions. If you are unable to make choices for yourself regarding your finances or health, powers of attorney empower someone you trust to do so. Healthcare directives outline your preferences for care at the end of life. When creating your estate plan, it's also essential to review and update it regularly, we recommend reviewing your estate plan every two to four years as changes in your family or financial situation may necessitate updates to your plan. It's also a good idea to discuss your estate plan with your children, so they understand your wishes, your goals, and the rationale behind your decisions.
As a single parent, creating an estate plan is essential to ensure that your children are protected in the event of your death or incapacitation. As such, by naming a guardian, establishing a trust, and drafting a comprehensive estate plan, you can provide peace of mind for yourself and your loved ones. Working with a trusted attorney can make the process more manageable and streamline the process and procedures for executing your desires. It's never too early to begin making arrangements for your family's future, so don't put off drafting your estate plan. If you or a loved one is need of assistance and would like to plan for your future, reach out to the Law Office of L.M. Otey for a consultation, we’d be happy to assist.