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Estate planning – important for single parents

Here is a fast fact:

In Australia, there were 1 million 1 parent families in June 2020 making up 14.2% of all families, with 79.3% of these, being single mothers.

Of these 1 parent families, 64.8% had children under the age of 18, which is an increase of 12.4% since 2010.

If you are a single parent, it is important that your estate planning affairs are in order. When only one parent is involved, certain aspects demand special attention.

If you are a single parent, here are 4 important questions you should be asking:

1. Is my Will up to date?

Your Will should reflect any significant personal circumstances or relationship changes throughout your lifetime to ensure you are not putting your children’s inheritance at risk.

This is especially important if you are in the process of getting a divorce, separating from a de facto partner, or re-partnering. These big life changes may have a significant impact on your estate plan.

A Will is essential to ensure that an executor is appointed to manage your assets immediately when you die and to liaise with the guardian of your minor children.

Your executor can be instructed to hold your children’s share of your estate in trust for their health, education, maintenance and support until they become adults, instead of distributing the assets to them right away upon your death.

Considering various trusts, such as a testamentary trust, might be a good option for protecting your children’s inheritance, while ensuring your assets are available to support your children if necessary.

2. Have I selected an appropriate guardian for my children? 

Single parents making a Will (either for the first time or reviewing an existing Will) are often concerned about the appointment of a person to act as their children’s guardian in the event of their death.

The appointed guardian will be responsible for your children’s day to day care, welfare and development, whilst they are under the age of 18. This includes making decisions related to their education, religious upbringing, medical care, extracurricular activities, and residence.

The appointment of a suitable guardian (and substitute guardian) under your Will may help avoid uncertainty or family disputes about who is responsible for your children after you pass away.

Unless other arrangements have been made, the person appointed under your Will, will step into your shoes as guardian for your minor children.

What if my former spouse is still alive?

In Queensland, if there is a surviving parent, your children’s guardian appointed by your Will, will exercise their powers jointly with the surviving parent.

It is therefore important to discuss the guardianship of your children with your former spouse if they are still alive. Consistent appointment in your respective Wills, may avoid any confusion about the intentions of either parent.

Who should I choose as a guardian?

Before choosing someone to serve as guardian for your minor children, it may be helpful to have an open and honest conversation with the person to ensure that they will accept the responsibility.

Choosing someone whose parenting style is closely in line with your parenting style and goals for your children, may help your children adjust easier after your death.

Parents may include in their estate plan a Memorandum of Wishes which outlines of any specific factors and guidance for your guardian to consider when raising your children. 

3. What if I become incapacitated? 

As a single parent, it is also particularly important to include in your estate plan an Enduring Power of Attorney to specify who will act on your behalf when making financial and personal/health decisions in the event you become incapacitated.

If you have an injury, illness or you lose mental capacity, an Enduring Power of Attorney will give your appointed attorney authority make your health care decisions and to pay your bills, maintain your home, and ensure bills are paid for your children.

4. How does my superannuation and life insurance play a part?  

Many single parents worry about providing for the financial needs of their children after their death, especially if they are relying on a single income.

However, many are not aware that some assets are not controlled by their Will, such as life insurance proceeds and superannuation death benefits. There may be unintended consequences if you fail to make informed decisions when naming beneficiaries to receive such assets. 

Since minor children cannot receive these assets until they are of legal age, single parents need to determine how to protect these assets for their children.

An estate planning lawyer can help you develop a plan that can avoid tax issues while protecting your assets for the use and benefit of your children.

Review your estate plan

Estate planning for single parents may seem overwhelming; however, we are here to guide you through the process and make it less stressful.

We can provide suggestions for how to accomplish your wishes and goals for protecting your children in the event of your death or incapacity.

Please feel free to contact us with any questions or concerns.

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The information provided in this article is for general information and educative purposes in summary form on legal topics which is current at the time it is published. The content does not constitute legal advice or recommendations and should not be relied upon as such. Whilst every care has been taken in the preparation of this article, Wills, Estates and Probate Lawyers (WEP Lawyers) cannot accept responsibility for any errors, including those caused by negligence, in the material. We make no representations, statements or warranties about the accuracy or completeness of the information and you should not rely on it. You are advised to make your own independent inquiries regarding the accuracy of any information provided on this website. WEP Lawyers does not guarantee, and accepts no legal responsibility whatsoever arising from or in connection to the accuracy, reliability, currency, correctness or completeness of any material contained in this article. Links to third party websites or articles does not constitute any endorsement or approval of those sites or the owners of those sites. Nothing in this article should be construed as granting any licence or right for you to use that content. You should consult the third party’s terms and conditions of use in relation to any third-party content. WEP Lawyers disclaims all responsibility and all liability (including liability for negligence) for all expenses, losses, damages and costs you might incur as a result of the information being inaccurate or incomplete in any way. Appropriate legal advice should always be obtained in actual situations.

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Duncan MacDougall

Written by—

Duncan MacDougall

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