If you are a single parent, you may have thought about what would happen to your children if something happened and you weren't around to take care of them. A well-thought-out estate plan will help to ensure that your children are taken care of in instances like this. Read on to learn more.
What Is the Process of Estate Planning?
Estate planning consists of the arrangement of the transfer assets to beneficiaries, the identification of trustees and executors, and the assignments of caretakers for minor children. In addition, it consists of minimizing taxes and determining a durable power of attorney who can perform the management of the estate's investments and assets. More importantly, however, if estate planning is handled properly, it can help avoid an expensive conservatorship proceeding that would be mandatory upon your passing with minor children and no prepared estate plan.
What Documents Are Needed?
To make sure that your children receive what is rightly theirs upon your passing, there are a few documents that you will need to ensure you have compiled.
1. A Will—A will needs to specifically name the person who you want to be responsible for handling your estate, the preferred guardian of your minor children, and any intended beneficiaries. In addition, your will should include detailed instructions on how you would like your assets managed. The person you appoint to manage your estate will follow these instructions.
2. A Revocable Living Trust—Single parents who have minor children need to seriously consider having a trust drafted, as this will designate an individual as a trustee, or the person who will be responsible for administering, distributing, and disposing of assets accordingly. They will also manage the inheritance of the named beneficiaries.
3. The Nomination of the Guardian—While it may be possible that your former partner survives you, it is still a good idea to nominate a guardian for your child should something happen to you before they reach adult age. The person you choose to be the guardian of your children will become responsible for them if your former partner is unable to take care of them or decides to waive their parental rights.
4. Power of Attorney—The designated trustee will take care of your financial affairs and the legal side of things on your behalf via the power of attorney. You should also consider the advance health care directive, which is similar to the power of attorney except it covers decisions related to medical care.
5. Beneficiary Designations—While you are designating beneficiaries in legal documents like wills and trusts, you need to also update these names on your retirement and insurance accounts. Keep in mind, though, that minors are not permitted to be named as beneficiaries. Therefore, you will need to speak to your lawyer about placing these proceeds into a trust until your children have reached the appropriate age at which they can draw the funds.
If you need help with your estate planning, get in touch with a local estate planning attorney.Share