Both single and married parents need to do basic planning to provide direction for their children in the event that tragedy strikes. They must decide who will care for their minor children if they can no longer do so themselves. They must also determine who will manage their children’s money and property until they reach adulthood.
Unlike married parents, single parents face even more issues when planning ahead for their family’s future. Single parents may lack a support system of family members that they could count on if the worst were to occur. Often, they will want to leave the responsibility of caring for their minor children to siblings or parents. Unfortunately, their parents may be elderly, and siblings could live hundreds of miles away. Despite these difficulties, it is still important to plan ahead. If you are divorced, you will want to put certain parameters in place for your child if he or she goes to live with your ex-spouse after your death. You can ensure that someone you trust meets your goals for his or her care, as well as manages his or her finances.
A revocable trust may be advisable for singles in these types of situations, as they allow asset protection for your children, as well as better planning. A revocable trust allows you to create a trust for yourself where you are the trust-maker, the trustee, and the beneficiary. It has no affect on how your income is reported on your tax returns. It simply transfers title so that your trust assets are no longer considered probate property. This can save you probate costs, which can exceed over $6,000 in North Carolina. On your death, a new trustee will take over the direction of your trust. Revocable trust planning is good for many different situations, such as if you own property in multiple states, if you have special needs children, or if you have complex family dynamics.
In contrast, young married couples need at least a will as part of their planning documents. Otherwise, their children will inherit along with their spouse per North Carolina’s intestacy statute. There are many ways that married couples can avoid probate, such as through the proper use of beneficiary designations on life insurance and retirement accounts, property held as tenancy by the entirety, and transfer on death (TOD) accounts. These assets all pass outside of probate, allowing you to avoid paying hefty fees. However, if you are divorced, be sure to update your beneficiary designations, as even an ex-spouse will be entitled to your assets if listed as a beneficiary on your retirement account or life insurance policy. Be sure to review your beneficiary designations whenever you experience a major life change.
If you or your loved one needs assistance with revocable trusts, or if you have questions about government assistance programs such as Medicaid or Veteran’s Benefits, consider W.G. Alexander & Associates – we offer a unique blend of asset protection, Elder Law and estate planning. You can also attend our free seminars, learn more through our website at www.wgalaw.com, or call us at (919) 256-7000.
Attorney Bill Alexander discusses these issues and more every Tuesday morning on W.G. Alexander & Associates’ radio program, “Asset Protection Today,” on TalkRadio 850 WPTK (AM). Be sure to listen tomorrow from 9:00-10:00 AM. To listen to last week’s show, please visit WPTF’s on demand show blog by clicking here.