Every estate planning conversation eventually comes to center upon the children, regardless of whether they’re still young or adults.
Talk to a qualified estate planning attorney and let him or her know your overall perspective about your children, and what you see as their capabilities and limitations. This information can frequently determine whether you restrict their access to funds after your death, and how long those limitations should be in place.
Kiplinger’s recent article, “Estate Planning for Single Parents” explains that when one parent dies, the children typically don’t have to leave their home, school, and community. However, when a single parent passes, a child may be required to move from that location to live with another relative.
After looking at your children’s situation with your estate planning attorney to understand your approach to those relationships, you should then discuss your support network to see if there’s anyone who could serve in a formal capacity, if necessary. A big factor in planning decisions is the parent’s relationship with their ex. Most people think that their child’s other parent is the best person to take over full custody in the event of incapacity or death. For others, this isn’t the case. As a result, their estate plan must be designed with great care. These parents should have a supportive network ready to advocate for the child.
Your estate planning attorney may suggest a trust with a trustee. This trust can accept funds from your estate, a retirement plan, IRAs, and life insurance settlement. This trust should be set up so that any court that may be involved will have sound instructions to determine your wishes and expectations for your kids. The trust tells the court who you want to carry out your wishes and who should continue to be an advocate and influence in your child’s life.
Your will should also designate the child’s intended guardian, as well as an alternate, in case the surviving parent can’t serve for some reason. The trust should detail how funds should be spent, as well as the amount of discretion the child may be given, and who should be involved in the child’s life.
Your trust should state who has authorized visitation rights, including the right to keep the child for extended visits or for vacation. It should also name the persons who are permitted to advise or consent on major decisions in the child’s life, such as issues about education, healthcare, and financial activities.
A trust can be drafted in many ways, but a single parent should discuss all of their questions with an estate planning attorney.
Reference: Kiplinger (May 20, 2019) “Estate Planning for Single Parents”