What single parents need to know about estate plans to protect and provide for their families
No parent wants to think about not being there to raise their children, but preparing for the worst is the purpose of estate planning. Single parents especially need to have their finances in order, and a trusted guardian designated, early on in their child’s life, since caregiving responsibilities may not default to a partner or spouse in the event of a tragedy. All parents should plan for emergencies by creating a will, maintaining insurance, and establishing trusts. But there are some elements of estate planning that are especially important for single parents.
Follow these steps to take control of your children’s future.
Designate a Guardian
If a couple is married and one partner dies, the other retains guardianship of their children. Single parents need to designate a guardian, or else their home state’s court system will decide what happens to the child in the event of the parent’s death. Guardians are typically relatives, often a parent’s sibling, who is around the same age and may also have children. Grandparents are another option, but if they pass away before the child turns 18, yet another guardian will need to be chosen. Close family friends can also be appointed — there is no requirement that a child’s guardian be a blood relative. Choose someone you believe will provide the best care for your children throughout their lives. While you will be able to leave money for your kids, it’s wise to choose someone who is financially stable themselves so they won’t be dependent on the funds you’ve provided.
Create a Will
As you are evaluating your estate plans, work with an attorney who can legally prepare your will. They will provide documentation to designate your chosen guardian, inventory your assets and belongings, and describe how they should be disbursed to your children throughout their lives.
Update your Insurance Policy and Retirement Plan
While you can’t list minors as beneficiaries on these plans, you can set up a trust or other arrangement that will preserve these assets for your children. Talk to an experienced attorney to determine the best way to structure insurance and retirement policies that will benefit your children. Similarly, take out a life insurance policy and make sure the proceeds will cover expenses until your child’s 18th birthday. Now is also a good time to consider how you’ll pay for your child’s health insurance if you pass away. In some states, your child can remain on your insurance plan for up to three years after your death, while in others coverage ends immediately. Look into the laws and designate funds specifically for insurance in your will if necessary.
Create a Guide for Your Guardian
No one can replace you as a parent, but you can help smooth the transition for your children by assembling a file with important contact information for key figures in their lives, from legal advisors to friends. Include all account information for your beneficiaries. Some parents include a list of usernames and passwords for online accounts their children may need to access, or that their will may request be closed on their behalf.
Single parents are especially busy, and estate planning can seem overwhelming. Working with an attorney who specializes in estate planning will make the process as pain-free as possible. We know it’s painful to imagine leaving your young children behind, but preparing for the worst is one of many hallmarks of a good parent. Take comfort knowing your family will be protected even if you aren’t there to protect them.