As a single mother, the responsibility of raising kids alone can be overwhelming. With so much to juggle, it’s easy to put off overwhelming tasks such as estate planning. However, estate planning is crucial for single mums! We need to ensure our kids are taken care of in the event of our unexpected passing.
Below is a comprehensive guide to estate planning for single mothers.
A Single Mum’s Guide To Estate Planning.
1. Create a Will.
A will is a legal document that outlines how you would like your assets distributed after your passing. It’s essential to have one to ensure that your children are taken care of financially.
In Australia, you can get an online will, use a will-making kit, or work with a lawyer.
Before you begin creating your will, it is helpful to gather the necessary information. This includes summaries of your assets, debts, and beneficiaries so you can create an accurate and comprehensive will. You can also name a guardian for your children in your will, and any other instructions you want to leave. I have a “wish list” attached to mine. More on this another time!
To ensure your will is valid and legal, it’s got to be signed and witnessed by two adults who are not beneficiaries of the will.
Note that the process for creating a will may vary slightly depending on the state or territory in which you live in Australia. It’s recommended that you seek professional advice or guidance to ensure that your will is valid and meets all legal requirements.
2. Decide on Your Executor.
The executor is responsible for carrying out the wishes of the deceased person as outlined in their will. It’s a complex and very time-consuming role. Some of the key responsibilities of an executor in Australia include:
- Obtaining a copy of the death certificate.
- Applying for probate – a legal process that confirms the validity of the will and gives the executor the authority to administer the estate.
- Notifying beneficiaries named in the will that they are entitled to a share of the estate.
- Identifying and valuing assets owned by the deceased person.
- Paying any debts or taxes owed by the deceased person (using assets of the estate).
- Distributing remaining assets of the estate to the beneficiaries named in the will.
- Keeping accurate records of all transactions related to the estate and providing regular updates to the beneficiaries.
It’s very important to choose someone you trust to carry out the instructions in your will, as this person will be responsible for managing your estate after you pass away.
3. Name a Guardian for Your Children.
It is important to name a guardian for your children in your will, even if you are divorced. If you are the sole legal parent of your children, then naming a guardian in your will is especially important. It ensures that someone you trust will be responsible for your children’s care in the event of your death. If you pass away without a will, the court will decide who will take care of your children.
If you and your former spouse have already named a guardian for your children in your divorce agreement, it’s still a good idea to include it in your will. This is because the will can be used as evidence of your wishes in case there is a dispute or confusion about who should care for your children.
When naming a guardian in your will, it’s important to consider factors such as the guardian’s age, health, financial situation, and ability to provide a stable and loving home for your children. You also need to discuss your wishes with the person you have chosen to ensure that they are willing and able to take on the responsibility if needed.
4. Set up a Trust.
A trust is a legal entity that holds assets for the benefit of your children. By setting up a trust, you can ensure that your children’s financial needs are met if you pass away unexpectedly. You can appoint a trustee to manage the trust and distribute the funds to your children as needed. This can be the same person as the executor.
5. Create Powers of Attorney.
A Power of Attorney (POA) is a legal document that allows someone else to make decisions and act on your behalf. A POA can be used for a specific period, or it can be set up to take effect only if you become unable to make decisions for yourself.
An Enduring Power of Attorney (EPOA) is a specific type of POA that continues to be effective even if you become mentally incapacitated or unable to make decisions for yourself.
6. Review and Update Your Estate Plan Regularly
Your estate plan is not a one-off event. It’s important to review it every few years to ensure that it continues to reflect your current wishes and meets your current needs. As life circumstances change, your estate plan will need to be updated accordingly.
Some of the important times when you should update your estate plan include:
- Changes in your personal or financial circumstances such as getting married, getting divorced, having a child, or receiving a large inheritance.
- If your relationships with family members, friends, or other beneficiaries named in your estate plan change.
- If you experience a significant deterioration in your health, you may need to update your estate plan to ensure that your wishes are still relevant and appropriate.
Updating your estate plan may involve more than just making changes to your will or other legal documents. You may also need to update beneficiary designations on insurance policies, retirement accounts, and other assets to ensure that they are consistent with your estate plan.
7. Store Your Estate Planning Wishes.
Make sure you store your will and other important documents in a safe place, and let your executor know where they are located. You may also want to keep printed copies of everything filed, in addition to keeping electronic records.
Finally…
Estate planning is an essential step for single mothers to protect their children’s future. By taking these steps, you can ensure that your children are taken care of in the event of your unexpected passing. And you can find peace of mind knowing that you have taken steps to protect your children’s future.
P.S DID YOU KNOW?
Thrive Tribe – the global membership experience for single mothers – will be opening again soon. Join the waitlist here.
Know someone who needs to read this? Share it with them via the links below.