If you are a single parent, life for you right now probably couldn’t get any busier. You are likely being pulled between work, school activities, and home – and the inevitable emergencies that fill the lives of single parents everywhere.
Being a single parent is a huge responsibility, even if you do share time with a parenting partner, and especially so if you don’t. Regardless, as a single parent, your children’s lives are now largely in your hands. So what would happen to them if something happened to you? Who would take care of them? Who would pay for their housing and food? Who would pay for their education? These are questions you need to get answered, and the best way to do that is through estate planning.
Having an estate plan that covers the care of your children in case you should be in a severe accident, fall ill, or die welcomes peace of mind for the single parent knowing everything and everyone they love is taken care of. Here are the must-haves that can protect your children if something were to ever happen to you:
Will
A will lets you name the person responsible for your estate and belongings as well as who will inherit your assets. Most importantly this is the legal vehicle you use to name a guardian for your children, without a will, the state will decide their fate. The greatest risk you leave behind when ignoring this piece of your estate plan is that your children could be taken into the care of strangers at any time.
Revocable Living Trust
There are so many benefits of a living trust for single parents. First, a trust enables you to still control your money and property while you’re able, but if you die or become incapacitated, it transitions that decision-making authority immediately to the person you have named as your trustee (obviously someone you can trust and count on to do what you would have wanted). If your children are still minors or even young adults their inheritance can be handled for them until the time comes when they are capable (and you decide that time). Plus, if you have a trust, your estate doesn’t have to go through probate, which can be costly and time-consuming. Without trust, you risk draining your hard-earned money on probate costs. This is not ideal if your children need to continue living in their homes and having their expenses paid.
Durable Power of Attorney
As a single parent, you are likely the only signatory on your mortgage, your bank accounts, and other financial instruments. What would happen if you became incapacitated and there was no one to pay the mortgage or the bills? That is why it is important to have a durable power of attorney in place. When choosing your power of attorney, it should be someone you trust managing your financial affairs, while also make legal decisions on your behalf if you are unable to do so.
Advance Medical Directive
An advance medical directive gives you the legal power to the person you choose to make your health care decisions in case you are not capable of doing so yourself. This is especially important if you are not re-married or do not have immediate family members nearby.
Beneficiary Forms
Your life insurance policy, retirement accounts, and brokerage accounts all require beneficiary designations. Those you designate to receive the assets in these accounts will only receive them if you execute the proper beneficiary forms! They cannot pass to your heirs via a will or trust. And minor children should never be named as beneficiaries as they are not legally able to own assets.
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