No two dads are cut from the same cloth; each one is as unique as the children who love them. So are their estate planning needs. One may have children jet-setting off to college, while another needs lifelong care for a child with special needs. One dad may have just his home (which is no small feat), while another has a bustling business he wants to pass on to the next generation.
The single dad has his own particular set of considerations. There is no double income or another partner’s financial and legal backup. Whether you are a single dad or a dad in a new domestic partnership, here are five estate planning rules that should be etched on Mount Rushmore. We urge all single parents (including both dads and moms) to read on:
- Get a Will and Set Up a Trust
A Last Will and Testament (“Will”) is one of the most important estate planning documents for single parents. If the other parent is deceased, absent, or otherwise unable to participate in the child’s life, you, as the natural parent can name a legal Guardian to manage your children’s interests in case of your sudden death. If you have minor children (those under 18 years of age in Florida), it is imperative that you take care of your children physically and financially if something happens to you. This Guardian designation can be done within your Will or in a separate document called a “Declaration Naming Pre-Need Guardian for Minor.” Settling this now, in writing, will minimize lawsuits that could arise over custody if you pass away (and the other parent is no longer in the picture).
Even more protection comes from a Trust, which has the extra advantage of not going through the court supervised probate process – which can take months for your children to see any of their inheritance. In the standard “Revocable Trust,” you, as the creator of the Trust, are the Trustee for the rest of your life. Within your Trust, you will choose a back-up Trustee who takes over in case of your death. This Trustee will manage the Trust as per your wishes, making sure assets are wisely used for the children’s health, education, maintenance (day-to-day living and support), and other needs that may arise on their journey into adulthood.
- Designate a Power of Attorney
If you become mentally or physically incapacitated and cannot make decisions for your family, you will need a trusted substitute to take care of these matters for you. Setting up a Durable Power of Attorney ensures that the right person of your choosing will be making important legal and financial decisions in case of your incapacity. Remember this is a very trusted position and should be discussed with an estate planning attorney so you understand the full ramifications of creating this document.
- Make Sure You Have Enough Life Insurance
With no financial or legal backup from another partner, the single parent should consider investing in extra life insurance to make sure their children’s needs are adequately covered into adulthood and beyond. Remember however, that you need to put a beneficiary designation on that life insurance policy, and it should not be a minor child (under 18 years of age). Why? Because Florida law prohibits minors from inheriting more than $15,000 in their name. Anything in excess of that will need to go into a court-supervised guardianship account with a court-appointed guardian. If it sounds confusing just reading about it, trust us, it is worse in real life. This is where a Revocable Trust can save the day by adding your Revocable Trust as the beneficiary of your life insurance policy. In that scenario, your kids inherit the policy t-h-r-o-u-g-h the Trust and no guardianship process is needed. Additionally, your estate attorney can also help you devise a coverage plan to potentially minimize your assets from some tax liabilities.
- Check Beneficiary Designations on Financial Policies
When checking insurance coverage and other assets you will leave behind, make sure you have the proper beneficiaries designated on each policy. Remember that naming your minor children as your beneficiaries is a huge red flag. Work with your estate attorney to determine the most effective protection plan for your family. This can be accomplished through creating that magic Revocable Trust or finding an adult you trust completely to handle the process.
- Plan for Business Succession
If you have a business, have your business attorney include it in your estate planning. Ask yourself, do any of your children want to run your company after you retire or pass away? If the children do not end up owning it, a succession plan can help you ensure it will continue to benefit them after you are no longer at the helm.
These rules are advisable for all dads (and moms), not just singles. But everyone has different ways of applying them. Whether you are in a conventional marriage or a domestic partnership, are with your high school sweetheart or are on your second or third try at wedded bliss, we have the tools to design a plan that is tailor-made for your unique needs. Contact OC Estate & Elder Law at (954) 251-0332 or firstname.lastname@example.org to get started with a free phone consultation. Our attorneys are fluent in English, Spanish, and Russian.