As a single parent, estate planning is even more important than it is to your dual-parent peers. This is because, if you die in the absence of proper legal and financial arrangements, the court will be left to decide the custody and guardianship of your children as well as the division of your assets.
If you become a single parent due to a divorce, your ex-spouse can petition for custody and in most cases, will be awarded it. If you are widowed, there may be issues with finding someone to care for your children, should you pass away.
To make sure that your family is taken care of after you die, proper estate planning should be done. Here are some of the implications that being a single parent entails, and the problems that a single parent might encounter:
Estate Planning Implication and Issues
- As you are the only parent, if you die pre-maturely, your children will face uncertain custody and guardianship issues.
- Your existing will might have your former spouse’s name
- Your existing CPF nomination might have your former spouse’s name
- Your existing life insurance nomination might have your former spouse’s name
- Your estate’s financial needs may be very different from a dual-parent situation
- If you transfer your assets to your children in one lump sum, they might not know how to handle it.
- You ex-spouse may be able to gain access to your assets in the capacity of being the other parent of your children.
Estate Planning Solutions and Considerations
- Review and update your will.
- Ensure you designate an appropriate guardian for your children, and communicate your intentions to the potential guardian.
- Review your estate’s financial needs.
- Review your life insurance portfolio and ensure that big ticket items like mortgage are properly covered.
- Review and update your CPF nomination.
- Review and update your life insurance nominations.
- Consider setting up a living or testamentary trust to hold your children’s inheritance if they cannot act legally (due to age) or have poor financial discipline. In this way, you can also set a timeline for the distribution of assets to your children.
- Consider setting up a trust if you do not want your ex-spouse to gain access to your assets in the capacity of being the other parent of the children.