Our lawyers recently heard of a divorced individual who passed away and left two children below the age of 18 years. When the person passed away, the individual had no will in place. As a result, it was uncertain who the deceased individual wanted to appoint as a personal representative of the estate.
Remember, a person passes away without appointing a personal representative, New York law dictates who can apply to be appointed as a personal representative. Because the deceased individuals were below the age of 18, they could not apply to the court for appointment as personal representatives.
The surviving family filed the appropriate paperwork with probate court hoping for the nomination of a conservator for each child. After the court-appointed conservators, the conservators selected a personal representative for the estate. The person chosen by the conservators then filed paperwork requesting the appointment of a personal representative. This person then gathered all of the deceased parent’s assets, paid the deceased person’s creditor claims, and then divided and transferred the remaining assets to each minor child’s conservator. These conservators must hold assets for the children until the children reach eighteen years of age. This case took a long time to resolve and involved substantial costs. Besides court fees, accounts, conservators, and lawyers also had to be paid.
While estate planning is critical for everyone, it’s particularly important for single parents. Several unique challenges are faced by single parents, including an elevated need to make sure that children are protected. This article reviews some helpful estate planning tips that single parents should make sure to follow.
# 1 – Single Parents Should Have Wills (And Probably Trusts)
A last will and testament is one of the most widely needed and fundamental estate planning documents. With a will, single parents can appoint a guardian for their child after their death. This step becomes even more critical if the child’s other parent has passed away or cannot care for the child.
Besides wills, trusts are often valuable estate planning documents for single parents. The beneficiaries of trusts are not required to wait for probate until assets can be distributed. A party can also be appointed to hold onto assets for children until they become adults.
# 2 – Life Insurance
Single parents will likely want to invest in additional life insurance coverage to make sure their children have sufficient financial support after death. An estate planning attorney can help you create a plan to avoid tax burdens while protecting the life insurance proceeds for the use and benefits of children long after the parent has passed away.
# 3 – Incapacity Planning
Single parents should make sure to create a plan in case they become incapacitated. Planning for incapacity should include naming someone who can make financial and health care decisions if the parent cannot do so. A durable power of attorney permits an agent to pay bills for the children from the parent’s financial accounts.
Contact an Experienced Estate Planning Attorney
Without the advice of a knowledgeable estate planning lawyer, it can be hard to know if you have written the strongest possible plan. As a result, you should not hesitate to speak with an experienced attorney. Contact Ettinger Law Firm today to schedule a free consultation.