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 to be distributed in the event of your death.
This article will discuss the most important factors to consider when forming your estate plan as a single parent, namely making sure you have an updated Will, have made plans regarding your insurance and superannuation and have appointed a guardian.
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 essential that your Will is up to date and reflects your current family composition and financial status. If you are currently in the process of separating from a partner or are entering into a new relationship, these changes can have a profound effect on your estate plan. Any, and all, alterations to existing Wills must comply with section 6 of the Succession Act 2006 (NSW). 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 is why it is crucial to have an accurate and updated Will which clearly sets out your wishes.
Life insurance and Superannuation
It is important to note that your life insurance and superannuation death benefits are not controlled by your Will. Beneficiaries should be nominated for these assets so that your children may be financially supported after your death. While minor children cannot receive these assets themselves, there are methods for protecting these assets until your children are older.
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 interests. The person you are considering appointing should be made aware of the significant responsibilities of this role. This includes communicating the specific arrangements you wish 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
Preparing an estate plan can alleviate the concerns involved with navigating through the uncertainties of life. Creating a Will, organising your assets and appointing a guardian will ensure your children’s interests are protected. If you are looking to create a new Will, or would like to amend your existing Will, please call us on (02) 9963 9800 or contact us via our contact form.