One of the biggest fears of single parents is that something will happen to them and they won't be around to raise their children. As horrific as this situation would be, it is actually a thought that can lead to positive action. Single parents need to be sure that they have a comprehensive estate plan.
The primary reason for you to have an estate plan set is so that you can ensure your children will have a good quality of life if something happens to you. There are a few components that you need to think about if you are a single parent. Here are a few to get you started:
Name a guardian
An adult will need to raise your minor children if you aren't here to do it. Naming a guardian in your estate plan gives you the chance to have a say in who is going to do this. Make sure you think about how well the person you appoint can care for the child. Many people name their parents as the guardian for their children, but this might not always be a good idea so look at the situation with an open mind. For example, if your parents aren't in good health, they might not be able to handle raising a spunky toddler.
Set up a will
Your will outlines who gets your possessions. When you are thinking about this, you might want to focus on the smaller assets you have that wouldn't need to go into a trust. Many assets can go into a trust that is used to benefit your child.
Trusts are an amazing tool to help ensure your child is financially supported. There are many different types to consider, so you need to think about your goals. You may be able to place specific conditions on the trusts, such as being able to reap the benefits when the child graduates high school, earns a college degree or gets married.
Check payable on death designations
Many financial accounts have payable on death designations. These accounts don't need to be included in the will. Bank accounts and life insurance policies are two examples. Make sure that you check the beneficiary information to ensure that the guardian has access to get a little help covering the costs of raising your child. Be sure to include the location and applicable information for these accounts in the letter of instruction that you have with your estate plan.