Estate planning for single parents requires special attention to ensure your kids will be cared for and financially supported as you wish should the unthinkable occur.
Estate plans for single parents is very often similar to estate plans for families with two parents. In each instance parents want to provide for their children’s care and financial needs should something happen. But when only one parent is involved, certain aspects of an estate plan demand special attention. If you’re a single parent, here are five questions you should ask:
- Are my will and other estate planning documents up to date? If you have no estate plan, contact someone to help you create one. A basic will plan will address your primary concerns and name a guardianship without breaking the bank. If you have a plan and haven’t reviewed your estate plan recently, do so as soon as possible. Your situation and circumstance may have changed making your plan out of date. Alternatively, the persons or plan you developed years ago may not address your current concerns or coals. The last thing you want is for a probate court to decide your children’s future.
- Have I selected an appropriate guardian? Will the person you name as guardian have the financial resources necessary to raise your child? If not, do you have insurance or other resources to support them? Is the other parent available to take custody of your children should you become incapacitated or die suddenly? If not, does your estate plan designate a suitable, willing guardian to care for them? How do you want your wealth or insurance policy used to support your child(ren)? For some parents, it may make sense to preserve your wealth in a trust until your children are grown.
- Am I adequately insured? This is one area where most financial plans are lacking. With only one income to depend on, plan carefully to ensure that you can provide for your retirement as well as your children’s financial security. Life insurance can be an effective way to augment your estate. Term life insurance policies are often a cost effective way to provide financial security should something happen. You should also consider disability insurance. Unlike many married couples, single parents don’t have a “backup” income in the event they can no longer work. A good financial advisor will educate you on options and help you select the policy that works best for you.
- What if I become incapacitated? As a single parent, it’s particularly important for you to include in your estate plan a living will or advance directive to specify your preferences for the use of life-sustaining medical procedures and a health care power of attorney to designate someone to make other medical decisions on your behalf. You should also have a revocable living trust or durable power of attorney that provides for the management of your finances.
- Have I established a trust for my children? Trust planning is one of the most effective ways to provide for children regardless of their age. Trust assets are managed by one or more qualified, trusted individuals or corporate trustees, and you specify when and under what circumstances funds should be distributed to your kids. But a trust is particularly important if you have minor children. Without one, your assets may come under the control of your former spouse or a court-appointed administrator.
Estate Planning Kansas City is an estate planning attorney in Overland Park providing wills and trusts to those in Leawood, Lenexa, Olathe, Prairie Village, Roeland Park and Shawnee and now serving Parkville, Riverside and North Kansas City from our Briarcliff Office. Each situation is different and this article is intended for informational purposes only and should not be taken as legal advice. The choice of a lawyer is an important decision and should not be placed solely upon the base of this post.