Parents have a natural instinct to protect their children - and some parents may already be thinking about the well-being of their children if they were to die unexpectedly. Drafting a will, appointing a guardian and setting up a living trust can all help ensure a decedent's children are well taken care of, but for single parents, planning an estate can be much different than it is for parents who are married.
There are a few steps single parents can take to ensure their children are taken care of in the event of the parent's death. First, it's a good idea for a parent to establish a power of attorney for financial matters. Single parents may be the only ones who have access to their bank accounts, which can make keeping up with utility and mortgage payments difficult after the account holder's death - especially if they wish for the children to remain living in the family home.
Additionally, retirement accounts and life insurance policies can house large amounts of wealth, and designating beneficiaries on those accounts will ensure that the assets are distributed to the proper heirs. Naming minors as beneficiaries, such as one's children, is not permitted because minors cannot control the assets.
Drafting a will is also an important step, because it allows individuals to designate those who are responsible for one's estate, and where those assets will be dispersed. Parents may also name guardians for their children in a will. In addition, setting up a living trust is beneficial because it allows an individual to control his or her assets while they are still living. A living trust can be beneficial even if the children are over 18 years of age, because the person responsible for administering assets can make sure the money is used towards sensible investments - like a down payment on a house or a college education.
A single parent - or any parent for that matter - may want to speak with an attorney before planning an estate. Proper legal direction may be beneficial when drafting wills, appointing a power of attorney or any other aspect of estate planning.
Source: The Huffington Post, "Estate Planning and the Single Parent," Alexandra Smyser, Jan. 16, 2015