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Why Single Parents Don’t Have the Luxury of Putting Off Estate Planning
Arcadia Weekly Apr 24, 2015
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By Alexandra Smyser
Being a parent is a lot of responsibility, especially if you are a single parent. In most states spouses are first in line to make health care and financial decisions for a person who can’t make their own decisions. But if you are not married, the question of who is the decision-maker gets much more complicated. As a single parent, it’s almost more imperative for you to create an estate to eliminate the guesswork for family members on how to continue to carry the parenting baton and fulfill your wishes should you become incapacitated.
Luckily, a well-drafted and thoughtful estate plan will reduce stress and conflict. Here are the documents of an estate plan and how they can help you as a single parent:
Revocable Living Trust: A trust allows the person you name to administer your assets and make distributions to beneficiaries on your behalf. This is important even if your children are technically adults. A good trust will name a trusted individual who can distribute the inheritance wisely with the goals of paying for college, food, maybe even the down payment on a house. A trust can also avoid probate, which can be expensive and time-consuming.
Will: A will gives you a chance to name who is responsible for your estate, and whom you want to give your estate to when you die. You can also use a will to name your choice as a guardian for your children. If you don’t have a will, your estate will be distributed according to the state’s plan and not yours.
Nomination of Guardian: If you are a single parent and if your child’s other parent is fit, care for the child will fall to him or her, regardless of your nomination. However, you should legally nominate a guardian either in your will or in a separate Nomination of Guardian document in the event the other parent cannot act. The guardian of your child doesn’t have to be the person who manages the child’s inheritance. In fact, it is wise to have these roles filled by two different people.
Power of Attorney for Financial Affairs: If you are a single parent, you are likely the only signer on your bank accounts and name on your bills. A durable power of attorney gives you the opportunity to name a trusted individual to manage your financial affairs and legal decisions during your life if you are not able.
Advance Health Care Directive: Similarly, a health care directive allows you to name someone you trust to make decisions about your health care when you are not capable yourself. It is important that you pick an agent that will carry out your wishes, even if it is difficult.
Beneficiary Forms: The beneficiary designations on life insurance policies and retirement accounts will control who the assets are distributed to, not your will or trust. Do not name minors on beneficiary forms, as they are not legally able to control assets and a guardian may have to be appointed by the court to manage the asset until the minor turns 18.
Personal Information: It would be helpful to prepare a list of personal information if someone has to step into your shoes and manage your life. Here is a list of information that could be powerful and required if you are incapacitated or die:
-List of advisors (legal, financial, health, insurance).
-Summary of accounts including institution, account number and any beneficiary information.
-A list of digital assets (online bank and investment accounts, social networking sites, any websites or blogs) including user names and passwords.
The basic parental instinct is protect your child. And the thought of not being around to raise your child is almost too much to bear. But the proper estate planning will give you the peace of mind to know that your child will be cared for with the minimum of expense and complication.
Alexandra Smyser is an Associate Attorney at the Law Offices of Donald P. Schweitzer in Pasadena. She handles all areas of Estate Planning including trusts, wills, probates, general and limited conservatorships, and special needs trusts. For more information on estate planning contact Ms. Smyser at (626) 683-8113 or visit http://www.pasadenalawoffice.com.
