By: Megan Gebhardt (Estimated reading time: 4 minutes)
National Single Parent’s Day is observed March 20th, and that is a great provocation to discuss estate planning for single parents. While any adult can benefit from an estate plan, a critical difference in estate planning for single parents is that they need to take action to delegate who can help take care of them and their financial affairs in the event they are incapacitated or pass away, whereas for married couples there is often a default set of laws that provide for the spouse to take on those roles. It is not difficult, but it is important, for single parents to set up documents that can provide for delegation of these roles.
What makes up an estate plan? In Washington, an estate plan typically consists of three essential legal documents:
- A Will or Trust
- Health Care Directive
- A Durable Power of Attorney for medical and financial decisions
These documents serve to implement your wishes and range from basic to complex – dealing with tax minimization, trust structures, and contingency planning. For single parents, each of these documents offers important opportunities:
- Will or Trust. A will or a trust is a set of legally enforceable instructions as to what you wish to have happen to your minor children and your assets when you pass away. A single parent is well served by using a will to nominate a guardian for a minor child. This helps control who would serve as the legal custodian of their child if they were to pass away before the child turns 18. It is also of value to a single parent who wants to control how their children can use the money they are leaving to them. To do this, a parent can create a will or trust that includes a Children’s Trust. For example, a single parent can use a will to direct money into a trust that can be used only to provide for education, health, maintenance and support of a child, and putting a Trustee in place to ensure that the money is used for those purposes and not on other items. Children’s Trusts can be a valuable tool for a parent who wants to ensure that a former spouse or partner will not have control over the assets being left to benefit their children.
- Health Care Directive. A Health Care Directive is a very end of life document that serves to make your wishes around end of life legally enforceable. It can be a valuable tool, not only to ensure that you are not kept alive artificially when you have no reasonable hope of recovery, but also to prevent that decision to maintain or remove artificial life-sustaining treatment from falling on the shoulders of family members.
- Durable Powers of Attorney. A Durable Powers of Attorney (DPOA) document allows you to nominate an Agent to make financial decisions for you, as well as medical/health care decisions. This document names someone of your choice to step into your shoes and manage these decisions on your behalf when you are not able to do so. For a single parent without a DPOA in place delegating financial decisions, incapacity can mean that a guardianship would need to be established for you. Or it could mean hoping a spouse, family, or friend would be able to create a patchwork system to provide for you financially if nobody else had the authority to make payments from your accounts. For the medical agent, Washington has laws that determine who is in charge medical decision-making when an individual is not able to make his or her own decisions and there is not a Durable Power of Attorney in place to instruct otherwise. However, for some, the default list of family members, spouses, parents, siblings, etc., who will make your medical decisions if you are not able to make them for yourself is not the best choice. A friend or non-immediate family member who is trustworthy and will follow your wishes may better serve in the role.
Estate planning for single parents is essential and can be very approachable, both from a time and cost perspective. Consider it a task that you can complete that will result in a set of documents that you can check back in on every so often while resting easy that you have a plan in place in the event of the unexpected.
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