Estate Planning for Single Parents

Sep 1, 2023 | Estates Planning and Asset Protection

Single parents face many challenges while caring for their children, from finding affordable daycare so they can work to juggling schedules and domestic duties (including the avalanche of unfolded laundry that has taken up residence on the couch). There are lots of questions, including, “Where should my child go to school?” and “What are the names of all the Paw Patrol characters?”

In all seriousness, one of the most difficult, yet most important, questions single parents must answer is, “What would happen if I weren’t around to take care of my child?” 

It’s an awful thought, but one that single parents who want to take every precaution need to address. Ask yourself: If I pass away, who will make certain my child’s needs are met and give them the kind of future I want?

The best way to ensure your child or children are protected and your wishes regarding their care are honored is to create a comprehensive estate plan.

What is estate planning? 

Estate planning is the process of creating a plan that expresses your wishes and desires for your estate that will be legally enforceable after your death. Through estate planning, you can also ensure that your loved ones receive the necessary support and care they need if you become incapacitated.

Undoubtedly, single parents and their children benefit from estate planning. And it’s never too late to start the process.

Regardless of whether you have a modest or large estate, creating an estate plan gives you the power to:

  • Decide who will raise your child or children
  • Control who receives your property
  • Provide for your child financially
  • Develop safeguards to protect your child’s inheritance
  • Minimize tax liabilities for your estate and child
  • Provide for your child with special needs

Having a plan in place gives you and your family peace of mind. And though they likely won’t be aware of it, estate planning is one of the most thoughtful things you can do for your child as a single parent.

Which documents are essential for estate planning? 

A comprehensive estate plan includes several estate planning documents. When developing an estate plan for a single parent, our Texas estate planning lawyer may recommend documents including:

Last Will and Testament 

A will is a legal document that decides how your estate is distributed after death. It appoints a personal representative to administer your estate. Your will names your heirs and explains how your property is to be divided among your heirs. It also allows you to name a guardian for your child and create a testamentary trust.

Living Trust

A living trust creates an entity to hold and manage your assets. The trustee named in the trust manages the property according to the terms of the trust. Trusts created outside of a will have much more flexibility, and there are many types.

Assets in a trust pass to the trust beneficiaries outside of the probate estate. Depending on the type of trust, you can also reduce estate taxes, maintain privacy, and protect assets from creditors. The type of trust a single parent needs depends on what they need and want to accomplish and their family’s circumstances.

Durable Power of Attorney

Also referred to as a financial power of attorney, the durable power of attorney appoints someone to act as your agent regarding financial affairs. The power remains in effect if you become incapacitated, eliminating the need for a conservator.

Medical Power of Attorney and Advance Directives

A medical power of attorney appoints an agent to make medical decisions if you become incapacitated. An advance directive allows you to convey your decisions regarding end-of-life healthcare.

HIPAA Authorization

This gives a loved one the authority to access your medical records.

Your situation might require additional documents to address specific situations. For example, you might need a Special Needs Trust if your child has special needs. A Special Needs Trust provides financial resources for your child without interfering with government benefits and assistance.

Do I need an attorney to create an estate plan? 

You can find estate planning documents online. However, these templates are generally not created by a Texas estate planning lawyer and are quite general, so they might not meet the requirements for these documents under Texas law.

As a result, the court might not enforce your wishes and could appoint someone other than the person you’ve indicated to care for your children—all because your will is invalid. 

On the other hand, consulting an estate planning attorney can provide you assurance that your estate plan is legally sound. An estate planning attorney can help you:

  • Create customized estate planning documents tailored to your needs
  • Identify key elements of an estate plan you need as a single parent
  • Identify issues that you need to address given your child’s needs
  • Take steps to avoid the costly and lengthy probate process for your child
  • Protect assets from creditors
  • Ensure the person you want to raise your child is appointed as guardian
  • Make choices that can reduce tax liabilities for your estate and your child
  • Ensure that each document in your estate plan complies with the law and is enforceable
  • Update estate planning documents whenever circumstances change

Before making any decisions, talk with an experienced estate planning lawyer who can help you understand the process of creating an estate plan and tools to protect your child if you pass away or become incapacitated.

What should a single parent’s will include? 

A single parent’s will should include several basic elements:

  • Nomination of a personal representative and an alternative personal representative to manage your estate
  • Directing your debts should be paid after your death
  • The names of your heirs
  • Specifics about how you wish your assets to be distributed to your child
  • The name of the person you want to serve as guardian and alternative guardian for your child

Some parents may also include a testamentary trust in their will. A testamentary trust places your children’s inheritances in trust. 

The inheritance is managed by a trustee named in your will. In most cases, the inheritance is used for the “benefit, upkeep, and education” of your child. You choose when the trust ends, at which point your child receives the remaining amount in the trust.

What is the best trust for a single parent?

The types of trusts single parents should consider include:

  • Revocable living trust if you want to bypass probate
  • Special needs trust if you have special needs kids
  • Testamentary trust if your Estate Plan is will based. 
  • Irrevocable life insurance trust if you have sizable assets or potential estate taxes. 

Note that a testamentary trust is limited in scope, so it’s wise to consider all your options.

A Texas estate planning attorney will review your situation and advise you on the best type of trust for your situation.

Creative and compassionate estate planning for single parents

Just imagining leaving your child alone can feel overwhelming. However, creating an estate plan is the best way to protect and provide for your child after your death. Contact the law firm of Shann M. Chaudhry Esq., Attorney at Law PLLC, to learn more about how you can protect your children with a comprehensive estate plan.

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