Parents always want what is best for their child and that desire persists even if something happens to them. Estate planning as a single parent is just as important as estate planning for a married couple. As a single parent, it can be helpful to consider estate planning to ensure your will is carried out as you would like it to be.
A will for a single parent is not much different than one for married parents. This document is your chance to designate where your property will go, create a financial scheme for your child’s care and future, and possibly appoint guardians for your child.
Generally, custody of a child will transfer to the living parent even if the single parent had full custody of that child. If there are reasons that the other parent is unfit to care for the child or will legally waive their rights, it is important to include that documentation in your files as you begin estate planning. Even if these aren’t the case, you should nominate your choice of a legal guardian, just in case the surviving parent is deemed unfit once approached.
It is imperative that you set your child up for success in the management of their inheritance. Setting up a trust for your child and appointing a trustee can be a successful way of doing that. Trusts allow you the option to distribute portions of your assets to your child at different age intervals. The trustee can also be given the power to release additional monies for what you define as worthy objectives, such as your child getting married or buying a home. Without such an account in place, your assets would merely fall into a UTMA account that gives full control of your money to your child when they turn 18 or 21.
As you begin estate planning, it is also important to designate a power of attorney who is a trusted person that can manage financial and legal decisions in your stead. This person should also have access to information such as a list of your advisors, friends and family to be notified, accounts and digital assets. Identifying a person who can make definitive judgments about your health care, if you are unable to, is also essential. Unmarried, adult children, without children of their own, should also have a power of attorney and a healthcare proxy in place, in case anything were to happen to them.
When you are starting your estate planning process, it is important to talk with your financial advisor and attorney. They could help you work towards achieving your goals and potentially setting your child up for success if anything were to happen to you. Feel free to reach out to us at Precision Financial Services to learn more about estate planning and how we can help.