It is estimated that one-third of American children live in a single-parent household, and single parents are advised to create an estate plan that provides protection for their children. Here are some tips:
Create a will that names a property guardian for your child(ren). If you die when your children are still minors, a court will recognize the person you have designated as property guardian to manage their inheritance if there is no other plan (like a trust) in place.
Establish a trust. You will can create a trust for each child, or a “pot trust” for all your children. You will need to name a trustee to handle your children’s inheritance until your children reach whatever age you specify in the trust to receive that inheritance. Since children under the age of 18 cannot directly inherit large sums of money or property, a trust protects assets for them until they are of legal age.
Name a guardian – one of the most important reasons for parents to have an estate plan is to legally name a guardian for your children; you can always change your choice if necessary, but if you don’t make at least one choice, the state will do it for you.
Name a custodian. Under the Uniform Transfers to Minors Act, you can choose a guardian to manage property you leave to a child until that child reaches the age of 21. If you don’t want them to inherit until they are older, then use a trust.
Use life insurance to fund a trust or custodianship, and invest in disability insurance to cover your living expenses in case you become disabled.
Gifts – talk to an estate planning attorney about the tax advantages of gifting portions of your estate to your children while you are still alive, which can help reduce estate taxes.
With the proper guidance, you can protect your finances and spare your loved ones the frustration of having to make costly and difficult decisions. for your free initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.