Did you know the most recent poll by the Pew Research Center reveals that the percentage of U.S. children who live with a single parent has jumped from 13% in 1968 to 32% in 2017?
Between Juggling work and children’s activities to trying to make sure their kids are safe, single parents have a lot on their plates. As a single parent, taking care of your kids all by yourself increases your stress level and responsibility. Single parents often worry about what happens to their kids if they die. Who will take care of their kids? Who will manage and control their finances?
If you are a single parent worrying about the future of your children, you must develop an estate plan that protects them. So, here’s a roadmap for an estate plan to help single parents.
A Living Trust
A living trust is the most significant estate planning tool for single parents. It’s a legal agreement created by a person while they are living. Once created, the person who makes the trust then transfers ownership of her/his assets to the trust. This allows single parents to be in charge of their asset while they are alive and then the trustee they’ve named will continue to manage the assets if they become incapacitated or die. In the living trust, the parent can establish the age at which their son or daughter can have the right to use the property.
Nominate a Guardian
Nominating a guardian for your children is a difficult decision to make. This gets tricky for a single parent because the guardianship may fail, regardless of your nomination if the other parent is fit. But, you must make the nomination in a will or a stand-alone document to make it clear that the other parent is not fit enough to take care of your child.
A Power of Attorney
With a power of attorney, you can name a person to manage your financial and legal matters when you become incapacitated. If you fail to prepare a power of attorney, someone has to visit the Probate Court and petition a judge to be your conservator. This is an expensive and time-consuming proceeding. You can talk to a Carlsbad estate planning attorney to find out how you can avoid this.
Beneficiary Designation Forms
From life insurance policies to 401(k) accounts, many single parents have beneficiary policies. If you have one, it’s important not to name your minor children as the beneficiaries because the Probate Court will appoint someone as the financial guardian, if something happens to you before they turn 18. So, it is wise to talk with an estate planning attorney to determine the best person (or trust) to name as beneficiary.
A Last Will
Even if you have a living trust, it’s still essential to create a last will. The last will allow you to nominate a person to take charge of any assets not included in the trust. Within the last will you will be able to dictate how you want your estate to be distributed after you die.
Estate Planning Steps for Single Parents – In a Nutshell
- Make a list of your assets and decide how you want to distribute the property.
- Choose a guardian parent and property guardian, and create a document of explanation.
- Make an appointment with your estate planning attorney in Carlsbad CA to discuss various estate planning forms including,
- Power of attorney
- Advance directives
- Discuss the beneficiary designations on IRAs, 401Ks, college savings plans, and life insurance policies with your financial planner.