Have you thought about an estate plan yet? If not, it is high time you talk to an estate planning attorney to get the responsibility sorted.
If you are a single/divorced parent, estate planning is one of the essential things that you can do for your kids. While you may be hale and hearty today, there is no way to predict the near future. Estate planning is a good way of protecting your children’s long-term well-being.
There are certain factors to consider while thinking about estate planning for single parents.
Are All Your Estate Planning Documents and Wills Up-To-Date?
If you have not taken a look at your estate plans recently, now is the perfect time to review it to make sure that it reflects your present circumstances aptly. Additionally, you must check the beneficiary designations present on your policy, retirement accounts, and other accounts as well.
It is because, taking care of estate planning documents as a single parent, the last thing you want is for an incorrect beneficiary or a probate court to decide your kid’s future.
Have You Chosen The Right Guardian For The Children?
If, due to an unfortunate situation, the other parent is unavailable to take care of your children when you become incapacitated, does your property plan include a willing and suitable guardian to take care of the kids?
Also, it is essential to check if the said guardian will require any financial aid to provide education and properly raise the children. If you think they may need some form of financial assistance, it is time you set up your wealth in a trust that your children can access once they grow up.
To understand if a person you have in mind can be appointed as a guardian, you must speak with an estate planning attorney to know more about what the guardianship designation entails.
Do You Have Adequate Insurance To Provide For Your Children After Your Demise?
As a single parent, one thing that will be worrying you the most is your children’s financial needs after your passing. Life insurance is one way to contribute funds for the upkeep and education of your children after your demise.
However, it would be best not to name a child as a beneficiary of the life insurance policy. It is because a minor cannot receive the funds from an insurance policy.
Instead, you can place the life insurance yields in a trust that gives you the power to direct how the proceeds are to be used to help your children. And, one way to plan and set up a suitable trust fund is by working with an experienced estate planning lawyer.
Should You Establish A Living Trust For Your Minor Children?
By appointing a living trust for your children, the assets in your trust will not face any probate and may immediately be transferred to the trustee, allowing them to use it for the care and support of your children.
If this is not the case, there are high chances of your assets getting hung up in lengthy probate proceedings. Also, living trusts let you define how you want the trust to be used, for instance, your children’s education, living expenses, travel, and more.
And, most notably a living trust is neither an equivalent nor a substitute to a will. An expert estate planning lawyer will help you understand the differences between both. Even if you establish a living trust, you will still need a will to provide for the distribution of properties that were not passed on to the living trust.
According to reports from Pew Research Center, around 23% of U.S. children under the age of 18 live with a single parent. If you are a single parent, though it is not an easy picture to think of, sooner or later, you may have to talk to an estate planning attorney to secure your children’s future at the time of your absence.