One of the primary goals of an estate plan is to take care of your family in the event of your death. It is not often pleasant to reflect on those circumstances, but it is a reality that all of us will necessarily face at one time. The best course of action, therefore, is to address potential problems and solve them using the legal tools available.
Certain elements of an estate plan are essential for everybody. One important document is called a durable power of attorney, which names a person who will manage your affairs if you lack the capacity to do so because of injury or illness. Without a durable power of attorney, someone who does not know you and your wishes could be assigned to take care of your finances and other concerns.
But some people in particular may benefit from the protection of a power of attorney and other estate planning documents. There are currently 12 million single parents in America, and in some cases, they cannot depend on the other parent to take care of their affairs and their children if something were to happen to them.
Single parents with children will want to lay out a plan for their children if they die from an accident or illness. Depending on the state's laws, the children may be given to a relation the parent dislikes, but estate planning can address that. In addition, a single parent can take out a life insurance policy that can provide for the children if they are unable to. The proceeds can be administered through a trust to give the children money when they are ready.
So while estate planning is important for everyone, single parents, who often lack the safety net of a second spouse's income, can benefit greatly by creating a plan that provides for their children.
Source: Financial Advisor, "Planner Offers Advice for Single Parents," Karen DeMasters, Feb. 21, 2012.