Estate Planning Must-Haves For Single Parents
Updated: Oct 29, 2021
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, 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 don’t. Regardless, as a single parent, 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 be in a severe accident, fall ill, or die 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, as well as who will inherit your assets. Most importantly, a will is the legal vehicle you use to name a guardian for your children. Without a will, the state will decide who cares for them. 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.
Revocable Living Trust
There are so many benefits of a living trust for single parents. First, a trust enables you to retain control your money and property for as long as 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 held and managed for them until the time comes when they are capable of receiving it (and you decide that time). Plus, if you have a trust, your estate doesn’t have to go through a substantial probate, which otherwise 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.
Financial 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 financial power of attorney in place. Remember - a will only takes effect once you die. If you are unconscious or otherwise incapacitated for any amount. When choosing your power of attorney, you should select someone who you trust managing your financial affairs, while also make legal decisions on your behalf when you are unable to do so.
Advance Medical Directive
An advanced medical directive allows you to choose someone that will have the legal power to make healthcare decisions on your behalf in case you are not capable of doing so yourself. This is especially important if you are not married or do not have immediate family members nearby.
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. Reach out to us to learn more 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.
One of the main goals of our law practice is to help families like yours plan for the protection of yourself and your loved ones through thoughtful estate planning. Call our office or book a call on our website today to schedule your free Life and Legacy 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 Joshua Ryden of Horizon Law Firm. 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 Life and Legacy Planning session during which you will get more financially organized than you’ve ever been before and make many crucial choices for the people you love. You can begin by calling our office today to schedule a Life and Legacy Planning session. Mention this article to find out how to get this $750 session at no charge.