As a single parent, it is critically important to have a comprehensive estate plan that protects your child(ren). Obviously, being the sole or primary caregiver doesn't leave you with much time on your hands. However, putting some time aside to meet with an estate planning attorney can give you some peace of mind. By having an estate plan in place, you won't have to worry about who will care for your children, who will provide them with the things they need, who will pay for their education, and other concerns you may have if something were to happen to you. Our will and estate team in Fort Wayne can assist you with a plan to include the following items:
Step One: Last Will and Testament
In your will, you can name a guardian who will be responsible for taking care of your children if you die or become incapacitated. If your child's other parent is involved in their life, most states will automatically give sole custody to them unless they are unable or unwilling, or have court-ordered supervised parenting time. If that parent is not involved, there is still the possibility that they could claim custody of the child even if you have chosen someone else to be the child's guardian. It's important to discuss the details of your situation with your estate planning attorney so that they can give you the best advice. Check with your attorney about choosing a short-term guardian as well, who is someone who could care for your children on a temporary basis until you recover or until the long-term guardian can get there. Also, in your will, you can choose who will inherit your assets.
Step Two: Revocable Living Trust
If your children are still minors, you can place your assets into a trust so that they can be used to provide for your children until they reach a certain age. While you are still living, you can manage the assets in the trust. Once you become incapacitated or deceased, control of the trust will go to the person you've chosen to be the trustee. In some situations, this may be the same person you've chosen as their guardian. However, it doesn't have to be the same person. For example, if your child will be raised by their surviving parent, you may want to have one of your own family members act as trustee so that the funds can be used for things like medical or educational expenses.
Step Three: Advance Medical Directive
An advance medical directive allows you to name someone to make medical decisions on your behalf if you are unable to do so for any reason. The COVID-19 pandemic is an excellent example of why having an advance medical directive is important. If you should happen to be in the hospital for several weeks, someone may need to make decisions about your care. By having an advance medical directive, you can ensure that it's left up to someone you know and trust.
Step Four: Durable Power of Attorney
While an advance medical directive gives someone else the authority to make your healthcare decisions, a durable power of attorney allows a person of your choosing to control your financial and legal affairs. This individual will be allowed to manage your financial accounts and to pay your bills, including your mortgage and other loans.
Step Five: Beneficiary Designations
As a single parent, you may consider a life insurance policy that will provide a financial cushion for your children if you pass away. However, as long as your children are minors, you will need to name someone else as the beneficiary. This also applies to financial accounts such as a retirement savings account, IRAs, 401ks, etc. Your estate planning attorney can help you decide when it's appropriate to name your trust as a beneficiary versus naming an individual. Be sure to keep the beneficiary forms on all of your accounts up to date on a regular basis.
The best way to ensure that your children will be properly cared for in your absence is to take the time to meet with an estate planning attorney. Our will and estate lawyer in Fort Wayne can help your loved ones avoid lengthy and costly court processes including probate and guardianship battles, as well as advise you on how to reduce the taxes so that your children will get the most out of anything you've left behind for them. If you'd like to schedule an appointment, simply call our Fort Wayne team at 969-1177