Estate Planning Must-Haves for Single Parents
Parenthood is challenging, to say the least. For solo parents — those who are single, widowed, divorced, or whose partners are deployed, incarcerated, or working — the challenge can be even more profound. Whether it’s staying up late with a sick child, coping with a sudden emergency, or tackling the myriad of mundane decisions throughout the day, a solo parent does it alone. But knowing it’s all up to you can also be an empowering responsibility.
As a single parent, your children’s lives are largely in your hands. 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?
Having an effective estate plan in place can provide immeasurable peace of mind for the single parent in knowing that everything and everyone they love would be taken care of in the event of the unexpected. Here are the estate planning must-haves that can protect your children if something were to ever happen to you:
Will
A will is a legal document that coordinates the distribution of your assets after death. Most importantly for our purposes here, a will is the legal vehicle you use to name a guardian for your children. Without a will, the state will decide their fate. The greatest risk you leave behind when ignoring this piece of your estate plan is that your children could be taken into the care of strangers at any time.
Revocable Living Trust
Living trusts provide many benefits for single parents. First, a trust enables you to maintain control of your money and property while you’re able, but if you die or become incapacitated, it transitions that decision-making authority immediately to the person you have chosen as your trustee. If your children are still minors or even young adults, their inheritance can be handled for them until they are mature and responsible enough to receive it. You can choose this predetermined time through your trust.
Plus, if you have a trust, your estate doesn’t have to go through probate, which can be costly and time-consuming. Without a trust, you risk draining your hard-earned money on probate costs. This is not ideal if your children need to continue living in their homes 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’s 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 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 not capable of doing so yourself. This is especially important if you are not remarried or do not have immediate family members nearby.
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. Call Cedar Counsel today to learn strategies for leaving these assets to your children without court intervention.
Kids Protection Planning Kit
A Kids Protection Planning Kit provides the legal planning tools you 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.
One of the main goals of our law practice is to protect families through thoughtful estate planning. Schedule your Life and Legacy Planning Session today so that we can identify the best strategies for you and your family.
This article is a service of Cedar Counsel. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love.