Estate Planning for Single Parents
Being a single parent can be one of the most rewarding experiences that you will ever go through. On the flip side, it also brings a set of challenges that can be unique to single parents, which can often be very overwhelming, stressful and sometimes feel as though you are very isolated.
Estate Planning is a very important part of being a parent, but even more important for a single parent. There are many questions and facets that need to be considered, many of which are often overlooked.
The Important Legal Information…
Do You Have A Will? If So, Have You Updated It?
There are many significant life events that should trigger you to review or update your Will. These include:
Marriage is very exciting, but when you have been a single parent for a long period of time, it can be daunting. This is especially the case when you are trying to update your Will and finalise your succession plan. Many people think that if they marry, but do not wish to alter their Will, then there is no need to update it. There are many reasons, especially when it may be a second marriage or there are children involved when you do not want to provide for a new partner. However, marriage automatically revokes a Will, so even if you sign a new Will in the same form as what you had before, it is imperative that you see a lawyer and refresh your Will. It is then clear to all parties what your intentions were when you made the Will.
Separation or Divorce
Separating from your spouse or partner can be a very traumatic experience, with updating your Will often being the last thing on your mind. Many people going through a separation think that they will formalise their property settlement first and, when that part of their life is finalised, then update their Will. This is very dangerous.
Your Will should be updated as soon as you separate from your partner, despite most of your assets most likely being jointly held. This is because it may be the case that your Executor will need to ‘stand in your shoes’ in any property proceedings should you die. Especially when there are children involved and you are left as a single parent, it is more important than ever that your assets are protected, and your wishes stated in your Will.
In summary, even if you have not finalised your property settlement or severed any joint tenancies, it is imperative that you update your Will to reflect your current circumstances and protect your children into the future.
Want to know more about what happens in a separation and/or divorce? Check out this article we previously put together: What Happens To Your Will/Estate When You Divorce?
When you are a single parent, you often feel that the burden of providing for your child or children is entirely on your shoulders. This feeling can be very overwhelming and stressful but with careful Estate Planning, some of this burden can be eased.
The Important Legal Questions: Have I Appointed A Guardian?
When you are a single parent, the question of what will happen to your children should you die before they reach the age of 18 years becomes very important. This is especially the case if your children do not have contact with their other biological parent, or if the other parent is not a suitable caregiver for the children.
There is a provision in your Will to select a guardian or guardians of your children. The guardian that you choose will effectively step into your shoes, and be responsible for the education, medical care, living arrangements and general caregiving of your children. It is important to select someone you trust and someone your children would be comfortable with.
It is very important, however, to understand the guardianship clause in your Will is only an expression of your wishes, it is not binding. The person or persons appointed in your Will will need to apply to VCAT to obtain legal guardianship. Other family members can apply for guardianship as well. In this case, it is up to the Court to decide what is in the best interests of your children. What is in your Will does weigh heavily on the Court’s decision, but it is important to remember that it can be overridden.
If your child does not have a relationship with their other biological parent, or it is a tumultuous or unsafe relationship, then you should keep careful documentation to support why you have chosen the guardian you have chosen in your Will.
Want to know more about protecting your minor children? Check out this article we previously put together: Appointing A Testamentary Guardian.
What Assets Are Not Covered By My Will?
One thing that often comes as a surprise to people is that superannuation is not included as an Estate asset unless you specifically direct it to, in the form of a Binding Death Benefit Nomination. If you have not completed this nomination, then it is up to the superannuation company to decide who received your superannuation. They can determine that it is payable to:
- (a) a spouse or partner (even if the relationship is no longer in existence);
- (b) children in the same or differing proportions; or
- (c) the Estate, which means it would be distributed in accordance with the Will.
As part of your Estate or succession planning, you should always review any nominations that are in place and update or amend those nominations if applicable.
Want to know more about the importance of Binding Death Benefit Nominations? Check out this previous article we put together: Superannuation + Binding Death Benefit Nominations!
You Also Need To Think About Powers of Attorney!
Estate Planning is not only about what happens when you die, it also includes ensuring that you have appropriate plans in place, should you become incapacitated. Therefore, it is crucial to include Powers of Attorney in your Estate plan.
Powers of Attorney include the following:
- Enduring Power of Attorney (financial and personal). This authorises a person to make financial and personal decisions on your behalf if you have lost your decision-making capacity; and
- Appointment of Medical Treatment Decision Maker. This allows a person to make medical treatment decisions on your behalf should you be incapable of making these decisions yourself.
Want to know more about Powers of Attorney and their importance? Check out this article we previously put together: What Are Powers of Attorney? Better yet, check out this article while you’re at it: The ‘Power’ in Powers of Attorney, to get a clear understanding of their importance.
Canny Legal + Expert Legal Advice
Being a single parent can be scary and there is certainly a lot to organise. Your Estate Planning is something that, while overwhelming, should not be overlooked as it can have disastrous consequences for your loved ones if things do not go to plan.
Canny Legal can assist with all facets of Estate Planning, get in touch with our legal team to make an appointment to see our Estate Planning lawyer!