Five Considerations for Single Parents
It is particularly important for single parents to prepare a proper estate plan since they often face certain challenges that co-parents do not. Like all parents, single parents want to ensure that their children are properly provided for in the event of the parents’ incapacitation or upon their passing. But unlike co-parents, a single parent cannot presume that a surviving spouse or partner will be there to make the right decisions on their behalf.
The Following are Five Estate Planning Issues to be considered for Single Parents:
Create a Will
If you’re a single parent, it is crucial that you have a Will that names a new guardian for your children in the event of your death. While primary guardianship will typically default to the surviving parent, you can still let the court know your reasons for naming someone else (the other parent is unfit, has drug or alcohol abuse issues, etc.), and they will be considered if something happens to you. Creating a proper Will is even more important if the children’s other parent is not alive or is otherwise unable to care for the child and it is important to always name a backup guardian(s). In addition, the Will controls who will inherit your estate assets upon your death, and who will serve as your Executor.
Establish a Trust
Single parents may also want to consider establishing a Trust. Any assets placed in a Trust will be immediately available to your beneficiaries because trust assets are exempt from the probate process which can take several months, and sometimes longer, to free up the assets for your children. In Virginia, the average probate is approximately 18 months if the process goes smoothly, and many last much longer. When you create the trust, you will have the opportunity to name a trustee who will manage the trust’s assets on behalf of your children and the assets are immediately available to them.
Take out a Life Insurance Policy
Another way that you can ensure your children are provided for after your death is to take out additional life insurance. An estate planning attorney can help you avoid tax issues while ensuring that the proceeds from your life insurance policy can be used to support your children for a sustained period of time after you pass away.
Plan for Incapacitation
You should also have a plan in place in the event that you become incapacitated. This plan will outline who can make medical, financial, and final decisions on your behalf if you are not able to do so. You should establish a Durable Power of Attorney, which names an agent who is able to make financial decisions when you cannot. This could be extended to include aspects for your child’s financial well-being. You should also include your Health Care Power of Attorney, which names an agent to make health care decisions for you in the event you are unable to do so, your Living Will, and your HIPAA in your planning.
Plan Your Business Succession
If you own a business, then you will also need to plan for business succession. This will ensure that your business can continue to operate and that your children can benefit from its profits. Once your children come of age, they can inherit the business.
Conversely, you might decide that continuing operations is not in the best interests of your children, and that the proceeds of the business’s sale would be more beneficial for them. In that case, you may want to establish a plan for liquidating the business upon your death. The assets can then be used to provide for your children.
If you are a single parent who is interested in safeguarding their children’s future, you should consult with an estate planning attorney at your earliest convenience. An experienced estate and elder law attorney can help you draft a plan that protects the interests of your children and ensures that they are provided for in the event of your passing or incapacitation. If you need help getting started, please contact our office at (757) 645-3176 or (866) 603-5976 to schedule an appointment.