Every adult needs certain estate plan documents. Among the essential documents for protecting the financial and emotional well-being of your loved ones are a will; beneficiary designations for life insurance, retirement plans, and IRAs; powers of attorney; and a living will. Making sure your beneficiary designations are up to date and creating a will should be your top priorities, as these items form the foundation of your estate plan. And, if you’re a single parent, a will plays an even more important role than usual in your estate plan.You use a will to specify who will receive assets upon your death and to appoint an executor to handle your post-mortem estate. But here’s why a will is especially necessary for you as a single parent: You use it to name one or more persons to serve as your child(ren)’s guardian in the event of your death.
What Does a Guardian Do?
There are two types of guardians. Each type has a distinct set of responsibilities that typically last until your children become legal adults. A day-to-day guardian is responsible for your children’s basic needs like food, clothing, and shelter, and makes decisions about their health care and education. The person you choose as a day-to-day guardian should have good parenting skills and values similar to your own. He or she should also be financially and physically capable of taking on this role — and willing to do so. Family members or trusted friends are typically the best candidates for the job. You should also designate a financial guardian to manage your children’s financial affairs. This person should be ethical, trustworthy, and knowledgeable about financial planning.
How Many People Should You Name as Guardians?
You can name more than one person to serve as either type of guardian. For example, you can name a partnered or married couple as day-to-day co-guardians. You can also name the same person or persons to fill the roles of both types of guardian. However, normally, it’s a good idea that a person you name as guardian should not also serve as the executor of your estate.
What If You Don’t Name Any Guardians?
If you don’t name at least a day-to-day guardian for your children, then in the event of your death, your state will decide who will raise your children. There’s no guarantee that the person chosen by the state would be someone who would meet with your approval.
Letter of Intent
If you’re a parent, your estate plan should include a letter of intent. It’s a document that addresses how you want your children to be cared for after you're gone. It can provide important information to your guardian or guardians, trustees, family members, and others who’d be involved in the care of your children after you’re gone. The letter may address issues like the children's medical care, daily routine, living arrangements, behavior management, degree of self-sufficiency, and more.
How Can You Learn More?
Click on the links below to register for EY’s August webinar, “Financial Planning for Single Parents,” for more helpful information about estate planning, guardianship, and how to better manage your finances. Register today.
Actively-contributing members of the Annuity Plan can also register for the webinars through the EY Financial Planning Center® website at https://pbucc.eyfpc.com, or by contacting an EY financial planner at 1.877.927.1047. Following the webinar, the EY Financial Planner Line® will be available to answer questions about your financial planning needs.