Estate planning serves to ensure an individual’s assets are distributed as they wish after they pass away. Proper estate planning is even more vital for a single parent to ensure the wellbeing of their children as they are solely responsible for providing for and protecting their children.
One of the most vital aspects of estate planning for a single parent is to designate a guardian for their minor children. If something were to happen to the parent, this ensures that a trusted person will be appointed to raise their children. It’s important to choose a guardian who shares similar values, has a similar parenting style, understands the needs of the children, and who would be willing to take on this responsibility. A parent should have an open discussion with the potential guardian and select an alternate guardian as well.
Establishing a trust or will is foundational to estate planning and can be created to protect and manage assets to provide for their children. A trust can ensure assets are held and distributed according to a parent’s wishes after their passing. A trust that exists until one’s children reach a certain age or milestone can be set up to provide ongoing support for their needs as they grow up, including education, healthcare, and other necessities for their wellbeing. This can also provide protection against potential mismanagement of assets or irresponsible spending.
Life insurance is vital as part of a single parent’s estate plan, providing a safety net to ensure children are cared for if a parent dies prematurely. The benefit payment from a life insurance policy can be used to cover living expenses, educational costs, and all other financial necessities. If the parent chooses to designate their trust as the beneficiary, life insurance proceeds can be used over time according to the terms of the trust to best provide for underage children according to the parent’s wishes.
It’s also important for a single parent to evaluate their beneficiary designations on retirement plans, annuities, and other financial accounts and make sure these designations are kept up-to-date. Again, a parent can choose to designate their trust as the beneficiary.
A single parent should establish health and financial powers of attorney to make sure decisions are made according to their wishes in case they become incapacitated.
Lastly, like everyone else, a single parent should review their estate plan and update it on a regular basis and following any major life event or financial change.
Creating an estate plan that aligns with a parent’s goals and honors the needs of their children can protect their future and help provide peace of mind for all family members.
For help with your estate plan, contact us at Wilson and Wilson Estate Planning and Elder Law, LLC at 708 482 7090 for our main office in LaGrange, Illinois or at 847 656 8958 for our Northbrook, Illinois office.