Taking the time to formulate an estate plan can often seem daunting. This is particularly true for the single parent. Single parents are already pressed for time as they “balance” the demands of taking care of their children, home and career. The mere thought of adding anything to the “to do list” can seem overwhelming. However, taking the time to develop an estate plan can ease some stress and help ensure that your children are provided for according to your wishes if you parent were pass away while the child is a minor. Here are a few documents and decisions a single parent should consider if they have not done so already:
- Drafting a Last Will. This document provides specific instructions to loved ones and family members on how assets should be distributed upon your demise, and can provide that assets not be distributed to your children until they have attained a specific age or satisfied by a specific condition, with the assets being held in a trust for the benefit of your children. Within the Last Will you will be able to select whom will handle the affairs of your estate (Executor) and administer any trust for your children (Trustee). This is very important, especially if the child’s guardian (for example the other parent) is not someone you would want handling your money for the benefit of your child. Without creating a trust for your children’s benefit, any inheritance would be held in joint control by the Surrogate’s Court (in New York) and the Guardian, with the Guardian ultimately deciding how said funds are to be utilized.
- Guardians. Arguably, the most important step when creating an estate plan for the benefit of young children is to determine who will be the guardian of the children. It is often recommended to choose guardians that are in a similar age group of the parent, or younger. It is important to keep in mind that if the other parent is alive and willing, that individual will likely gain custody of the children regardless of whom is named as a guardian.
- Revocable Living Trust. A revocable living trust allows the creator of the trust to remain in control of the assets while he or she is alive, but also name someone to manage the assets in the event of the creator’s incapacity or death without Court approval or oversight, such as a Guardianship proceeding or Estate (probate) proceeding. This legal tool avoids probate and can also help to ensure that children and young adults do not receive a large inheritance before they are mature enough to manage the assets. The trust can have a continuing trust for the children until they have attained a certain age and/or for their life, or until a specific condition is met, while permitting the trust assets and income to be used for the health, education, maintenance and support of the child.
- Power of Attorney. Single parents typically are the only account holders on their bank accounts and likely hold all their assets in their name alone. As such, what would happen if the single parent were to become incapacitated? Who would be able to access funds for the single parent and his or her children? Who would be able to pay the mortgage and bills? This is where a durable general power of attorney is important. It is a document that allows the single parent to name a trusted person to handle their financial affairs if they are unable to do so themselves. Without a Power of Attorney, the only way to gain access to assets is to petition the Supreme Court in Westchester to have a guardian appointed for the individual, which can be a long, expensive, stressful and contentious process, especially if minor children are involved.
These are just four of the legal tools and documents that can be used to help better ensure a single parent’s children are protected and the parent’s wishes are fulfilled. Other tools that can provide additional guidance are advance health care directives, which allow the creator to name an individual to make health care decisions on his or her behalf in the event of incapacity, and beneficiary designation forms on retirement accounts and life insurance policies.
Those putting together an estate plan are wise to seek the counsel of an experienced estate planning attorney. This legal professional can review your situation and help guide you through the process, better ensuring a plan that is more likely to reflect your wishes, as well as ensure the legal documents signed are valid and will be upheld if contested by a quarrelsome co-parent.
