5 Crucial Estate Planning Tips Every Single Parent Should Know
We salute all single moms (and single dads) for taking on the hardest job ever; raising your children. This is a true test of self-sacrifice, love, devotion, and of course, sleepless nights. Raising happy healthy humans is now the biggest part of your life. Unfortunately, love it or hate it, managing your finances and proper estate planning are the 2nd biggest part of your life.
Every ounce of knowledge helps, so we have compiled 5 crucial estate planning tips to ensure you and your children live a rich single life with financial peace of mind.
- A Last Will and Testament (“Will”) used to be an important estate-planning document that has been losing in popularity to a Living Trust. These days, Wills offer minimal estate planning protection UNLESS you have minor children. If you have minor children (those under 18 years of age in Florida), you can appoint a guardian(s) in your Will, who will care for them in case of your death. This reduces lawsuits that arise over custody in cases of sudden or unexpected death. The guardian you choose can be a single individual, or a couple. You can also choose primary guardians as well as backup guardians. Note that a guardian for your children can be a separate person as the guardian of property and money left behind for them.
- Financial Investments – It is always a good idea to meet with a Financial Planner so you know your options regarding life insurance policies, college savings plans, UTMA accounts, and IRA accounts. There are such a variety of options out there, that almost any budget can allow for some long-term investment strategies that will benefit your children or their educational options.
- Educate Yourself on Florida Inheritance Laws – If a minor child, (under 18 years of age in Florida), experiences the loss of a parent, and is entitled to receive an inheritance, FL law governs how this inheritance will be managed until the child turns 18. Inheritance includes real estate, proceeds in a bank account, life insurance proceeds, stocks, CDs, cash in a safety deposit box, or any other investments. When a child is set to inherit anything in excess of $15,000, a court must appoint a legal guardian to manage the minor child’s inheritance. The main reason is because minor children can be on a title, but they are not allowed to do business in their own name. Thus, whenever the owner’s signature is needed to refinance, sell, or conduct other business, the court will be involved to safeguard the minor’s interests. The process takes time, involves court expenses, and requires an attorney. All these fees will be paid from the inheritance. Note that although a parent is considered a “natural” guardian, only a court can appoint them as a “legal” guardian. A way around the guardianship process involves creating a Trust through an estate planning attorney.
- Meet with an estate planning attorney to discuss your options. Below is a common list of estate planning tools that will protect your children:
- If you own a home – creating a “Living Trust” also known as a “Revocable Trust” is the best way to ensure the home will pass to your loved ones without the lengthy court-supervised Probate process. Trusts are private documents used to by-pass probate, in which you get to name who inherits your home (or other real estate) and who will manage that property until your children become adults.
- If you have any investment accounts – make sure your minor children are not named as beneficiaries on these accounts, otherwise Florida Guardianship rules will apply.
- Durable Power of Attorney – A crucial legal document that functions while you are alive that allows you to select a person (the “agent”) to “step into your shoes” if you become mentally or physically incapacitated. The agent will be able to make legal and financial decisions and conduct transactions on your behalf. The Power of Attorney document ends when a person passes away. At which point, your Trust or Will should kick in to dictate the terms of how to distribute your estate.
- Health Care Surrogate & Living Will – A Health Care Surrogate, also known as a Health Care Proxy, allows you to name someone (the “agent”) that will make health care decisions for you in case you are unable to make them yourself. Such decisions include consenting to certain medical procedures, seeking a second opinion, obtaining medical records, or transferring you to a different medical facility. If you don’t prepare a Health Care Surrogate document, and you fall ill and cannot make your own medical decisions, then Florida law determines who is responsible for your healthcare decisions. If you are still legally married, this means your spouse!
- Make Sure Children and Pets Stick Together – Make provisions that if something were to happen to you, your children do not get separated from their pets. After the loss of a parent, a child relies on all things familiar, such as other family members, teachers, and pets. You want to ensure that the guardian that welcomes your children will also welcome your pets.
Being a single parent is the most important job you will ever have. We understand the love you have for your children and will help protect your family as well as your peace of mind. Contact OC Estate and Elder Law at (954) 251-0332 or email@example.com to receive a personalized consultation regarding estate planning and all your financial options as a single parent.