Happy Single Parent's Day: Steps for Your Children's Future
In 1984, Congress issued a resolution, signed by President Reagan, establishing March 21st as National Single Parent Day: a day devoted to recognizing the dedication of single parents, who make self-sacrificial efforts to care for their children’s needs and encouraging family members, friends, and communities to help provide an optimal environment for their children. It goes without saying, but if you are a single parent, you should feel proud of your efforts to nurture and care for your children. Here are a few additional things you can do to provide for your children’s future you may not have considered.
Name a guardian. If your children’s other parent is willing and able to care for them if you pass away unexpectedly, he or she will likely be given physical custody of the children and responsibility for their care. In the case of single parents, however, the other parent often may not be able or willing to take on this role. This is why it is crucial for you to name a guardian who will step into your shoes to provide day-to-day care for your children if something happens to you. If you do not name a person you trust, a court will step in to appoint someone. Because the person the court chooses to be your children’s guardian may not be the person you would have chosen, it is vitally important you designate this person in advance. You can name a guardian in your will (and in some jurisdictions, a separate document can be used specifically for this purpose): Although the court will still have to appoint the guardian, the court will typically defer to your wishes. In making your decision, there are a few factors to keep in mind: Does your chosen guardian share your values and parenting style? Will your chosen guardian require your children to relocate? Does your chosen guardian have the energy and stamina needed to care for your children? Do they have the time to be an involved caregiver? Do you want more than one guardian to care for multiple children, or do you prefer for the children to stay together? If you chose a couple to be co-guardians, if that couple divorces, who should get custody of the children? It is important to weigh the importance of these considerations in making your decision.
Create a custodial account. If your children are minors, you can establish a custodial account to hold an inheritance under a law called the Uniform Transfer to Minors Act or the Uniform Gifts to Minors Act. If you do not appoint the custodian, the court will appoint someone to control and manage your children’s inheritance until they reach the age of majority. This is necessary because minors legally cannot own money or property on their own. A custodian will manage the funds in the account for the benefit of your children, but the downside is that when they reach the age of majority (18-21 years old depending on applicable state and District of Columbia law), the funds will be distributed to them in a lump sum. At that point, they can spend the money as they wish, which may not be optimal for a young person who is not yet mature enough to make prudent financial decisions. In addition, any present or future creditors could try to reach your children’s inheritance to satisfy their claims.
Create a trust. A trust is often preferred over a custodial account because it is more flexible and can be designed to protect the funds against your children’s future creditors and their own imprudent