Single parent families now represent 14% of all Australian families, with a majority of their children being under the age of 18. Being a single parent can be difficult financially, therefore, it is important to ensure that your financial affairs and estate plan are in place to protect your children should something ever happen to you. An Estate Plan is legally binding and documents how you wish for your assets distributed in the event of your death.
This article will discuss the two main factors you should consider when forming your estate plan as a single parent, namely making sure you have an updated Will, have appointed a guardian, and have made plans regarding your insurance and superannuation.
1. Your Will
Your Will appoints an Executor to manage your assets and liaise with your children’s guardian. The Executor will hold your children’s share of the estate on trust until they become adults. Alternatively, a solicitor can assist you in setting up a private trust in which your children’s share of assets is held by someone other than the Executor.
As a single parent, it is important to ensure that your Will is up to date and reflects the current circumstances of you and your children. This is particularly true if you have separated, or are currently in the process of separating from a former partner, or entering into a new relationship as these changes can have a profound effect on your estate plan. You also need to ensure that any and all alterations to existing Wills should comply with section 6 of the Succession Act 2006 (NSW). Furthermore, if you do not have a Will, your assets will be divided according to the laws of intestacy, and may not be divided according to your wishes had you been alive. This emphasises the importance of having an accurate, updated Will which clearly sets out your wishes in the event something should happen to you.
It is important to note that your life insurance and superannuation death benefits are not controlled by your Will. It is important to nominate beneficiaries for these assets so that your children may be provided for financially after your death. While minor children cannot receive these assets themselves, there are methods for protecting these assets until your children are older.
2. Appointing a Guardian
In the event of your passing, it is important that a guardian is appointed. In multiple parent families, the surviving parent is made solely responsible due to the presumption of shared parental responsibility prior to the death. However, in single parent families, the appointed Guardian will be responsible for your minor children (those under the age of 18) in your absence, and will have decision-making powers over their care, welfare and development. Appointing this guardian will help support your children through the difficult transition in the event something happens to you. It will also avoid any uncertainty over who is responsible for them, and may assist in reducing family conflicts in the future.
This is a significant decision, as the appointed guardian will be responsible for their medical treatment, education, residence and other day to day considerations. It is important that you choose someone who you believe will make these decisions in your children’s best interest, in the same way that you would. A frank discussion with the person you are considering appointing is important to ensure that they are willing to take on this significant responsibility, as well as outlining specific arrangements to be made in your stead. You may choose to include a Memorandum of Wishes with your Will to provide any such specific guidance for your guardian.
Similarly, you may wish to prepare an Enduring Power of Attorney which specifies who will make personal and financial decisions on your behalf if you become incapacitated by illness or an accident.
How Etheringtons Solicitors can help
As a single parent important thing is to protect the interests of your children as you navigate major milestones in life. This may include removing or adding partners in the future. Any Will you have made may become obsolete and no longer representative of your wishes within a few years of drawing it up. If you would like to discuss constructing a new Will, or changes in your circumstances resulting in the need to review of your current Will, please call us on (02) 9963 9800 or via our contact form.