Estate planning for single parents is extremely important. Thinking about what happens if we become incapacitated or die is not pleasant. It is essential to have a plan in place for these possibilities. This need is even more critical for single parents who have children to care for. Here are some documents that single parents should have in place for themselves and their children:
Estate Planning for Single Parents – Nominate a guardian
In case of incapacity or death, who will become the guardian of your minor children? If the child’s other parent is surviving and has not lost parental rights, they will have custody of the children as a matter of law. However, if the other parent is deceased or has had their parental rights terminated, a court will need to grant guardianship.
To name the person you would like to become the legal guardian of your minor children, you need two documents. First, name your choices for the guardian in your will. It is best to name several people in order of your preference. For example, “My mother, Jane Smith, and if she cannot serve, then my brother John Smith, and so on.”
Secondly, complete a “Nomination of Guardian” document separately from your will. Your will does not have any effect when you are alive, so a separate document is important. Name the same guardians you’ve named in your will to avoid any confusion later on.
Health care directives
A health care directive is a document that states who is authorized to make health care decisions for you if you are unable to. It gives general directions about the care you wish to receive. Every adult should have a directive completed.
If you have minor children, a “Nomination of Heath Care Agent” should also be in place. This is a document in which you authorize another party to make healthcare decisions for your children if you cannot. This is necessary when, for example, you and your children are in a car accident. You cannot respond to authorize health care, hospitalization, or other treatment for your children.
A will and a trust
If you have minor children, it’s essential to have a will and trust in place. The will can set forth your nomination of guardians for minor children, as discussed earlier. A trust can hold your assets (including life insurance proceeds and possibly retirement plan benefits) for the benefit of your children until they reach certain ages.
The trust is managed by the successor “trustee” you appoint in the trust document. Even if the child’s other parent is surviving and the child lives with that parent, your assets may be kept separate in a trust and distributed by the Trustee only under the specific terms you set forth. In this way, your assets are not available to your ex-spouse, and the children also don’t receive the funds until they are mature enough to handle them.
If you only have a will at the time of your death and have minor children, your estate will go through probate, the assets will effectively be placed in a trust for the child, and the assets will belong to the child when they reach age 18. That’s an expensive and inefficient plan. It is what California has in store for you if you don’t takeimplement your own plan by setting up a trust.
Children 18 and over
Once a child turns 18, he or she is a legal adult, and your nomination of a guardian is no longer needed, and your nomination of a health care agent no longer applies. Instead, ensure that your adult children execute their health care directive, power of attorney, and HIPAA form. This is especially important when the parents are divorced since both parents are the legal “next of kin” (for unmarried children). It can be crucial to have a document that says which parent can act on the child’s behalf.
As a single parent, you have a lot on your plate. However, having these crucial legal documents prepared can greatly simplify things in case of an unexpected event. Remember the age-old adage, “hope for the best, plan for the worst,” when it comes to raising children.
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