Estate Planning Documents: A Guide for Single Parents
Estate planning is vital no matter how many parental figures there are in a family. But its importance heightens when a child fully depends on one parent. If you’re a single mom or single dad, getting these documents in order will ensure you have a say in where your money, assets, and minor children go in the event of your passing.
3 estate planning documents single parents should consider
A will is a legal document that outlines a person's wishes for the distribution of their assets and the guardianship of their minor children. When a married person passes away, their children typically stay with the surviving parent. But guardianship is less clear when a single parent passes.
If you’re unmarried but share custody of children, the surviving parent will likely become their full-time guardian.
If you’re unmarried and don’t share custody of children, the court will appoint a legal guardian. Some candidates may include the non-custodial parent, a grandparent, other extended family, or family friends.
Wills must be probated, which can be time-consuming and costly. A trust is an additional document that can help you avoid this process and preserve the value of your estate.
A living trust
A living trust is created during a person's lifetime to transfer assets to a trustee. The trustee manages and distributes the assets to beneficiaries without the need for probate. Overall, this offers more privacy and control. In the case of single parents, speed may be especially valuable as it ensures quicker access to assets for their children’s needs.
A living trust also allows for specific instructions on how assets are managed and distributed. For example, maybe part of what you leave to children is a fund they can only access to cover the cost of higher education.
An irrevocable trust
Unlike living trusts, an irrevocable trust can’t be modified after it’s created. So why would anyone choose an irrevocable trust over a living trust? While the latter offers flexibility, irrevocable trusts may offer more asset protection, potential estate tax benefits, and long-term control over assets for beneficiaries. If you’re a single parent looking to solidify your estate plan and protect your minor children, turn to Wood + Lamping LLP for guidance. General Electric Credit Union (GECU) members can schedule a no-cost consultation with a legal advisor to start the conversation.1 Not a member yet? You can bank with us if you live or work in the Tri-State.