Estate Planning for the Single Parent
You’ve probably heard it before – “You need to execute a Will and name guardians for your minor children.” You know it’s important and necessary, but between getting back and forth to work, shuttling kids to soccer games, doing the grocery shopping, and taking regular showers, who has the time? The goal of this article to discuss why it is important to make time for Estate Planning and some of the things you should consider in the process.
What is Estate Planning?
Estate Planning is much more than just signing a Will. Estate Planning is systematic planning for physical and financial management of yourself and your dependents, in the event of your death or disability. Practically, this means thinking through what you would want to happen if you became disabled or passed away, putting legal documents in place to accomplish those desires, and making sure the right people have access to the appropriate documents and information.
What documents do I need?
State law and individual circumstances vary, but in general, every adult needs the following:
- Financial Power of Attorney
- Medical Power of Attorney
- Medical Advance Directive
- Medical HIPAA Release
- Guardianship designations for minor children.
Additionally, it is critical to consider Beneficiary Designations on bank accounts, retirement accounts, life insurance, and other assets held with financial institutions. If you have named an individual or entity as the death beneficiary on these accounts, they will not be controlled by your Will but will automatically pass to those named individuals upon your death. Sometimes this is not a problem; however, in many cases, clients believe that they have only given someone signature authority over their account, when actually they have given someone joint ownership with right of survivorship. This causes those funds to pass directly to that person instead of to the client’s heirs. In other cases, clients set up trusts in their Wills but then are unable to fund them because all their assets pass to designated beneficiaries instead of under the terms of their Wills. Thus, it is vital to make sure that your beneficiary designations are in line with your overall plan.
Special Considerations for Single Parents
As a single parent, there are a few extra things you need to take into account when handling your Estate Planning:
1) Terms of divorce decrees or custody orders
- Divorce decrees and custody orders often affect how assets are disposed of and how guardianship of minor children is determined. It is critical to review these documents to make sure any relevant terms and restrictions are incorporated into your Estate Plan.
2) In many situations, the other parent of your minor child(ren) will be first in line to obtain legal guardianship over them and their assets.
- Unless there is some provable, compelling reason to do so, judges are reluctant to bypass a parent for legal guardianship. It is important to consider this when completing guardianship designations and when determining how assets will pass to children.
3) Make sure your former spouse is no longer the designated beneficiary on your financial accounts (except as required by an applicable court orders).
In conclusion, Estate Planning is critical to the well-being of you and your loved ones. It ensures that medical and financial decisions will be handled by trusted individuals and your desires will be followed. Though it requires some work on the front end, you can gain peace of mind knowing that you have given the gift of good planning to your loved ones. Contact a qualified attorney if you have questions about Estate Planning for your particular situation.