According to the Pew Research Center, nearly 23% of children in the United States live with only one parent—more than three times the number of children from around the world.
Estate planning for single parents is similar to estate planning for households with two parents in many ways, as they both involve providing for children’s care and financial needs down the road. When there is only one parent involved, though, certain aspects of the estate plan require additional foresight.
If you live in a single-parent household, here are some things you will need to address in your estate plan.
If you become incapacitated or pass away unexpectedly, your children will need an appropriate guardian. In the event that the other parent is unwilling or unable to take custody, does your estate plan identify a suitable, willing guardian for your children?
Additionally, will that guardian need financial assistance in caring for your children and providing for their education? Depending on your circumstances, you may want to consider keeping your wealth in a trust until your children reach a certain age.
Trust planning is one of the most effective ways to ensure your children are cared for financially. With a trust, you can specify when and under what circumstances the funds should be distributed to your children. In the meantime, you can designate a qualified, trusted individual or corporate trustee who can manage those trust assets.
This is particularly important if your children are minors—without a trust, your assets may end up being controlled by a former spouse or court-appointed administrator.
As a parent, your estate plan should include a living will, advance directive, or health care power of attorney. As a single parent, this is essential, as these documents allow you to confirm your health care preferences and designate someone to make medical decisions on your behalf, should you become incapacitated.
It’s also a good idea to have a revocable living trust or durable power of attorney who will manage your finances if you cannot do so.
Need to revise your estate plan?
If you’re a single parent, it’s critical to have an up-to-date estate plan in place. Our financial advisors are happy to help you review and revise your estate plan. Contact us to get started today.