What Single Parents Should Consider When Estate Planning

Estate planning is never fun, but it can be even more daunting when you are a single parent and have a tremendous amount on your plate. Regardless of how busy you may be, it is critically important to take the time to plan out what will become of your assets and (most importantly) your children, should you die unexpectedly before they are old enough to care for themselves.

In most states, when a parent becomes incapacitated or passes away, the spouse automatically inherits the rights to make any decisions regarding the children. However, for single parents who are widowed or divorced, it becomes much more difficult to determine who should handle decisions regarding your children and estate if a clearly outlined will isn’t available. Similarly, if you are in a domestic partnership and raising your children with someone you are not married to, it is important to remember that your assets won’t automatically transfer to that person the way they would if you were married.

Creating an Estate Plan

Here are some of the basic things single parents should consider when estate planning:

• If your children are minors, the first thing you should do in your will is name a guardian for them. If no guardian is named, the courts will decide where your children would end up.
• If you don’t already have life insurance, you should get it as soon as possible. If you have it, it is important to make sure that your coverage leaves enough money to cover any expenses for your estate, as well as the daily and long-term needs of your children. One way to do this is to house your insurance policy within an irrevocable trust, which would separate it from your estate taxes.
• Review the beneficiaries that you have named in any savings vehicles, such as 401(k)s or IRAs, and make sure that your children are named as the beneficiaries.
• Make sure your children’s health insurance won’t end with your death. It if will, consider options for insuring them after you are gone.

Since each person’s situation is unique and you likely have very specific long-term goals for your children’s financial security, it would be wise to sit down with a financial advisor to discuss questions about the best way to handle your situation. It is important to make sure that whomever you name as a guardian for your children are made aware of your plans to secure your children’s future.

• January 30, 2018
• Miscellaneous
• Alpine Bank Staff

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Alpine Bank Staff

Alpine Bank is an independent, employee-owned organization with headquarters in Glenwood Springs and banking offices across Colorado’s Western Slope, mountains and Front Range.

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