Everyone needs to embrace estate planning as early as possible. Some estate planning tools and benefits are common, while others vary by demographic. Below are some strong reasons for single parents to plan their estates.
According to investopedia.com, parents who give birth to children in 2022 will use approximately $272,049 to raise the children until age 18. The approximation includes housing, food, and clothing, but not college expenses.
Few people have hundreds of thousands in their savings accounts. Many married couples hope their spouses can help take care of the children. That option is nonexistent for single parents. Estate planning tools can help you provide for childcare costs in case you are no longer around. For example, you can buy life insurance and designate the children as beneficiaries.
Even if your minor children have access to money for their everyday expenses, they still need an adult to care for them. For example, the children need an adult to sign legal contracts (such as apartment leases), get medical treatment consent, and give them advice. Estate planning tools allow you to designate an adult to do those things for the kids if you are not around.
You need to protect the resources you plan to leave to your children if you remarry. Some children in blended families have had to fight for their rightful share of assets after their biological parent's death.
While you hope your children will never have to go through such difficulties, the best thing is to prevent such complications while you are still alive. For example, you can set up a living trust and designate the children as beneficiaries. That way, the children can directly access the trust fund in case of your death.
Many people rely on their spouses to make critical decisions in case of incapacitation. For example, a married person can help get the best medical care and look for treatment funds if their partner is in a coma.
Designate a person to help you with such tasks if you become incapacitated. For example, you can give someone your durable power of attorney to handle your financial matters. A healthcare proxy can make medical decisions on your behalf if you cannot do so.
The above are just a few reasons to plan your estate as a single parent. Hopefully, you will plan your estate in time and enjoy the associated benefits.
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