Among the many challenges confronting single parents, estate planning can be one of the most significant if overlooked. Because you are single, it might be overwhelming to consider the impact of your absence on the upbringing of your children. This article is designed to help the single parent and the ones you rely on, to understand the issues at hand and the potential consequences if you don’t make plans now.

Tools of the Trade

The basic documents needed for planning a single or a married person’s estate should be familiar from Jerry Shiles’ prior articles. For review, they are a Will, a Durable Power of Attorney and an Advance Directive for Health Care (also known as a "Living Will"). Depending on your individual circumstances, you may also decide to form a Trust. We will talk this time about using of the Will to provide for your minor children, and we’ll talk about using a Trust in future article.

What’s in a Will

In the event you die while your children are minors, your Will governs not only the disposition of the property you have, called the "tangible and intangible assets" of your estate, but also what you desire for your most precious legacy, your children! It is imperative in your Will to provide someone to serve as the children’s primary care-giver, known as a guardian. Guardians come in two varieties. For minor or incapacitated children, you will need to appoint someone to care for the child, known as the "guardian of the person" and someone to manage the property owned by the minor child or set aside to provide for the child’s care. This person is referred to the "guardian of the property". These positions may be held by the same or different people.

Appointment of a Guardian

If you die and there is no other parent able to assume the role of guardian, the court will name one or more individuals to be in charge of the "person" and "property" of your child. If you don’t make a designation, the court will use its own judgment to attempt to determine what is in the best interest of the child and may resort to a statutory hierarchy of family members. This may result in someone raising your children whom you would not have chosen. Furthermore, if more than one person wants to assume the role of guardian, a bitterly contested legal suit could result, increasing the stress upon your children and other family members, as each may have a different opinion of what you would have wanted and who is best suited to raise your child.

You may, by your Will, take care of such a conflict by appointing one or more persons to serve in this important capacity. There are many considerations in selecting a guardian. Should you name an individual or a couple? If you appoint a couple, who should continue to serve, if they should separate or divorce? Who are your alternate choices in the event that your first choice is unable to assume such a responsibility? You should also consider the lifestyle, values and proximity of the prospective guardian to your other family members, as well as number and ages of other children in the family your child will be joining. If you choose a non-family member, it is important to keep in mind that your family will want to remain an active part of your child’s life.

Yet another important consideration in selecting a guardian is whether this person can afford to provide your child with the standard of living that you want for them and if they would have the resources to house your children, and even if your children could continue with their current social lifestyle such as their friends, church and schooling. Take a look at what you will have as liquid resources upon your death, to support your children until they reach legal age and thereafter if you want them to consider college. Insurance policies should be considered for this purpose, if it looks like there might be a shortfall.

Directing Your Property for Your Children’s Benefit

Your Will should provide a mechanism that preserves your property for your children while making necessary resources available to provide for their current care. Minor children are rarely permitted to take property outright, so any property passing to them will be held in Trust until they are of legal age. Although the court requires periodic accountings of the guardian of the child’s property, this may not ensure the use of funds as you would have wanted. In some circumstances, court supervision may not be so regular as to intervene in mismanagement prior to significant depletion of assets. This is why it is to choose persons to manage your child’s assets that would be governed by standards you design to protect and direct the use of your assets, so there will be no waste or mismanagement.

All of these needs can be addressed by a testamentary Trust. A testamentary Trust is one that goes into effect at the time of your death, according to the terms you set forth in your Will. Some common areas to address are if your children are underage or if they have a physical or mental incapacity. The terms of the Trust will be fully set forth in your Will, therefore you will be able to determine the appropriate uses of the Trust funds. It will also name who you want as Trustee and successor Trustees. If you choose more than one trustee (co-trustees) to serve together, this would require them to agree and might prevent mismanagement, however they should be able to work well together and be a good balance for the other.

You have the flexibility to establish a Trust for each child, and state how you want the assets divided at the time of your death, or you may provide for a single Trust to hold all the assets for all of your children. You can control the duration of the Trust, specifying that the Trust continue in existence until a certain objective is met, such as your child’s college graduation, or for a fixed time, such as your child’s reaching a specified age. Special consideration must be given to the terms of a Trust for a disabled child of any age. You should refer to prior articles ( discussing Supplemental Needs Trusts for our previous discussion of these issues.

Upon settling on who would be good candidates to care for your children as guardians or trustees, be sure and talk to the persons or couples about your plans, even the ones you name as successors. Being a guardian or trustee is not a ceremonial position, like a god-parent, but rather a commitment that comes with tremendous responsibility and should not be taken lightly. Be sure they are financially and emotionally willing and able to assume the role. After you set up your Will with the testamentary trust terms, be sure and discuss the terms at length with them to make sure they know exactly your intent.

There are several other issues that we will attempt to address in future articles, however to get a great overview of estate planning, please plan to attend one or both nights of a two night Seminar at Autry Technology Center this next week, Tuesday and Thursday, March 11^th and March 13^th taught by Gary Brown and Jerry Shiles, attorneys at Brown & Associates. These sessions are open to the community for a nominal fee. Tuesday night will focus on basic estate planning and will address single person and blended family estate planning. Thursday night will be more advance planning with a special session for Farmers and Ranchers. You can register for one or both nights by calling Autry at 242-2750. We hope to see you there!

©2003 Sarah Lane