Taking the time to formulate an estate plan can often seem like a daunting process. This is particularly true for the single parent. The single parent is likely already struggling to balance the demands of taking care of the children, home and working a job outside of the home. With these struggles the mere thought of adding anything to their "to do list" may seem overwhelming. However, taking the time to develop an estate plan will likely ease some stress since the plan can help ensure that your children are provided for according to your wishes in the event of your demise.
Those who find themselves in this situation are not alone. In fact, both ABC News and the Huffington Post recently ran articles providing some tips for single parents to put together a successful estate plan. Some of the most valuable pointers include:
- Drafting a Last Will. This document provides specific instructions to loved ones and family members on how assets should be distributed upon your demise, and can provide that assets not be distributed to your children until they have attained a specific age, with the assets being held in a trust for the benefit of your children. Within the Last Will you will be able to select whom will handle the affairs of your estate and administer any trust for your children.
- Guardians. Arguably, the most important step when creating an estate plan for the benefit of young children is to determine who will be the guardian of the children. It is often recommended to choose guardians that are in a similar age group to the parent, or younger. It is important to keep in mind that if the other parent is alive and willing, that individual will likely gain custody of the children regardless of who is named as a guardian.
- Revocable living trust. A revocable living trust allows the creator of the trust to remain in control of the assets while he or she is alive, but manages the assets in the event of the creator's incapacity or death. This legal tool can also help to ensure that children and young adults do not receive a large inheritance before they are ready to manage the assets. The trust can have a continuing trust for the children until they have attained a certain age and/or life while permitting the trust assets and income to be used for the health, education, maintenance and support of the child.
These are just three of the legal tools that can be used to help better ensure your children are protected. Other tools that can provide additional guidance are advance health care directives, which allow the creator to name an individual to make health care decisions on his or her behalf in the event of incapacitation, and a power of attorney for financial affairs, allowing an individual to control bank accounts and other finances when you are unable. It is also wise to review beneficiary designations on life insurance and retirement policies and update if necessary.
Those who are putting together an estate plan are wise to seek the counsel of an experienced estate planning attorney. This legal professional can review your situation and help guide you through the process, better ensuring a plan that is more likely to reflect your wishes.