Single parents are often busy being parents. Scheduling work, school activities, sporting events and dealing with things as they come is a big responsibility. You want to make sure your kids will be taken care of and one of the best ways to do this is to have a proper estate plan. Below are the documents of an estate plan that single parents should consider:
Revocable Living Trust
You may set up a trust for your children during your lifetime which allows you to be in control of your assets while you are alive and able. If you die or become incapacitated, control and management of the trust moves to a person you have named to be trustee. A revocable living trust may also avoid having to obtain Letters Probate for your Will which could save time and money.
Last Will & Testament
Every person over the age of 18 should have a Will, especially parents of young children. Single parents may name the person who will act as the personal guardian and the guardian of the property of their children. Often, your child`’s other parent will be your child’s guardian on your death, but you should still nominate a guardian in your Will in case the other parent is unfit or unable to care for your child at the time of your death. You may also set up a trust for minor children in your Will and choose who will be the trustee for any inheritance until your child is an adult. It is important to consider whether you want to choose separate people to personally care for your child and to manage the money for your child.
Enduring Power of Attorney
Single parents often have things in their name and their name only. If you own a house, yours is the only name on title. You are likely the only signer on bank accounts or for household bills. It is important that you have a Power of Attorney who is able to step in and manage your finances when you cannot. Having a Power of Attorney means you get to choose a trusted friend or family member to handle your affairs and make sure your children are cared for.
Many types of investments like RRSPs or Tax Free Savings Accounts as well as life insurance policies allow you to designate a beneficiary on your death. The named beneficiaries will receive those assets directly and will only fall into your estate if the named beneficiaries do not survive you. You should not name young children as direct beneficiaries and should carefully consider setting up a trust to deal with these types of assets.