Estate planning for the single parent
There are some estate planning issues that single parents are advised to consider when planning for the financial future of their children. Among them is the selection of a guardian who will raise their children in the event the parent dies or becomes incapacitated. The parent should think carefully about the choice of a guardian if there is no spouse or partner who could take custody.
If the guardian you select for your children does not have sufficient finances to support them, you may wish to create a trust to preserve your wealth for your children until they reach adulthood. In this way, you may rest assured that someone of your choosing will be responsible for your children, and not a guardian appointed by the state. You can officially appoint a guardian in a will drafted by your estate planning attorney.
As a single parent, you will have just one income with which to support yourself, with the exception of retirement benefits. You may wish to consider purchasing life insurance in order to provide financial support for your children. In addition, disability insurance would help provide you with assistance in the event you become incapacitated.
It is also imperative that you have an advance medical directive in which you appoint someone you trust to make medical decisions on your behalf if you are unable to make them yourself. Your children could assume this responsibility if they are of age, or you could make arrangements with a relative or close friend whom you trust.
Moreover, it is recommended that you appoint a power of attorney who will manage your financial affairs and make legal decisions if you are no longer able to do so. This trusted individual will have access to your accounts, pay your mortgage and household bills, and help provide for your children’s financial future.
Furthermore, a revocable living trust will ensure that your assets will be distributed to your chosen beneficiaries. In an effort to lessen conflicts within your family, it may be prudent to have the trust managed by a third-party trustee. If you have minor children, your trustee will help you determine when and under what conditions your assets will be distributed to them. In so doing, your assets will not fall within the control of a court-appointed administrator or prior spouse.