Nearly a quarter (23%) of U.S. children under the age of 18 live with one parent according to the Pew Research Center. This is more than three times the share (7%) of children from around the world who do so. If this is your situation, make sure your estate plan properly accounts for your children. Below we will address specific items you should consider.
Choosing A Guardian
In many respects, estate planning for single parents is similar to estate planning for families with two parents. Single parents want to provide for their children’s care and financial needs after they’re gone. However, when only one parent is involved, certain aspects of an estate plan demand special attention.
One example is selecting an appropriate guardian. If the other parent is unavailable to take custody of your children if you become incapacitated or die suddenly, does your estate plan designate a suitable, willing guardian to care for them? Will the guardian need financial assistance to raise your kids and provide for their education? Depending on the situation, you might want to preserve your wealth in a trust until your children are grown.
Trust planning is one of the most effective ways to provide for your children. Trust assets are managed by one or more qualified, trusted individuals or corporate trustees, and you specify when and under what circumstances the funds should be distributed to your kids. A trust is particularly important if you have minor children. Without one, your assets may come under the control of your former spouse or a court-appointed administrator.
Addressing Incapacitation
As a single parent, it’s particularly important for your estate plan to include a living will, advance directive, or health care power of attorney. These documents allow you to specify your health care preferences in the event you become incapacitated and to designate someone to make medical decisions on your behalf.
You also should have a revocable living trust or durable power of attorney that provides for the management of your finances in the event you’re unable to do so.
If you’ve recently become a single parent, be sure to review and, if necessary, revise your estate plan. Contact our team with questions.