Single Parents and Estate Planning

Being a single parent means you’ll need to be sure your child is protected in case something unexpected happens to you. Single parents need a comprehensive estate plan, including a will, naming a guardian, preparing for financial support for the child and, if applicable, addressing the role of an ex-spouse in the child’s life.

Fundamentals of Estate Plans for Single Parents

The last will and testament includes a provision naming a guardian in case of the single parent’s incapacity or death. In most cases, a single parent will name a sibling as the guardian, especially if the siblings are close, so that the child will have the stability of family. When this is not possible, some single parents turn to their own parents, which is not always ideal. However, it may be better than other choices.

If there is no estate plan and no one guardian is named, the matter will go before a judge who will decide who will raise the children and where they will live. There is no requirement for the guardian to be a family member. While the court may attempt to place the children with a family member, it is possible they could go into the foster care system until a permanent guardian is found.

Trusts and Funding the Child’s Care

Parents purchase life insurance, so funds will be available for food, shelter, medical care and education. However, a minor should not be named as the beneficiary of the policy, since insurance companies will not pay a death benefit directly to a minor. In this situation, a court will appoint a guardian or trustee to manage the proceeds until the child becomes a legal adult.

A better solution is to create a trust and name the trust as a beneficiary of the life insurance policy. Upon death, the proceeds will go directly into the trust, and the trustee will have access to the funds for the benefit of the child.

Does the Child Automatically Live with the Ex-Spouse?

If a single parent dies and the biological or shared custody parent is living, the surviving parent may be awarded full-time custody. However, this is not automatic. If the surviving parent is not considered suitable, the court may name a guardian instead.

Protecting Children if a Single Parent is Incapacitated

Planning for a parent’s incapacity, where they are unable to care for themselves or their children, is as important as planning for the death of the parent. Once someone is incapacitated, however, they are not permitted to sign legally binding documents.

The estate plan must include a Power of Attorney, so another person can manage the single parent’s finances and keep the household running. If a trust fund has been established and funded, these funds will also be available to the trustee, if needed.

Providing for the Child and the Parent’s Future

Having an estate plan is especially important for single parents, who don’t have the luxury of relying on a spouse to step up in case of incapacity or death. With an estate plan in place, the parents can focus on raising their children, knowing they will be cared for, whatever the future may bring.

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