Estate Planning Tips for Single Parents

Most people think that estate planning is just for senior citizens. I guess the reason for that is because when we are younger we feel we are immortal, and that a premature death can't happen to us. The odds against premature passing are pretty high, and this has been reflected in the decrease in life insurance rates, especially term life policies. That kind of thinking, however, can be disastrous if minor children are involved. Whether you are a single or divorced parent the consequences of not planning can make life difficult not only for your children, but also for your surviving relatives.

By having a thorough estate plan in place, you can ensure that your children will be taken care of and financially secure even if you are no longer there to handle it yourself.

Consider:

1. If you become incapacitated or pass away, who will take care of your children, and how will they afford it?

2. If you are divorced and there is a support order, what happens if the obligor (person responsible for financial support) becomes disabled or deceased?

3. If you have a child support order in place, and were careful enough to make sure the obligor was insured, who is the owner of the policy and how will the policy be kept in force if the obligor chooses to let the policy lapse?

Tools for estate planning:

Powers of Attorney for parent and grandparents if appropriate.

Wills and/or Living Trusts

Life insurance policy on support obligor with someone other than the obligor owning the policy.

Scenario:

Jane, aged 30, has two children, age 5 and 3, is divorced and lives in the marital home. Robert, the father of the children, is under a child support order based upon the incomes and means of both parents. Jane would like for her own parents to take care of the children should something happen to her.