Being a single mother is not an easy job, and handling it all on your own can be overwhelming. But no matter how difficult it is, single mothers push through because they want the best for their children. They’ll do whatever it takes to ensure their kids are safe and happy.
While many of life’s hurdles are beyond your control, there are several things you can do to secure your children’s future. One of the most important is drafting a will and/or living trust.
Thinking about end-of-life matters may not be pleasant, but it’s vital for ensuring your assets are transferred to your heirs, setting them up for financial success when you’re no longer around to take care of them. Consider the following helpful tips for securing your legacy.
Draft a Will
A will is a legally binding document that details your wishes regarding your assets after your death. When you draft a will, you can name beneficiaries that will inherit your assets. Many single moms name their children as their beneficiaries. However, the will also must name an executor to manage their estate after they pass. The executor will ensure that your wishes are carried out appropriately.
A will can also be used to name a specific guardian for your minor children. It is a good idea to secure the services of an estate planning attorney to draft a will that works for your needs.
Purchase Life Insurance Coverage
The right life insurance policy can offer financial security for your children. In case something happens to you, it is critical to have a life insurance policy in place that provides enough coverage to meet the needs of your family.
Invest in Your Retirement
Especially as a single mom, it is critical to plan for the future. To secure a lasting legacy, make sure to invest in a retirement account. Some of the most common retirement investments include:
- Stocks and bonds
- Mutual funds
- Index funds
- Certificates of deposit (CDs)
Smart investments in your future can help guarantee that you will be able to live comfortably after retiring.
Establish a Trust
Trusts are legal arrangements in which a “trustee” manages designated assets on behalf of a beneficiary. For single moms, trusts are a reliable way to ensure that assets and wealth are distributed according to their wishes.
Trusts, like wills, are one way to provide for your children’s livelihood in the event of your death. These useful legal arrangements can save your family money and time by bypassing the probate process.
Assets held in a trust are also protected from some types of creditors and legal judgments. Depending on the type of trust you establish, you may be eligible for certain tax benefits to help preserve your wealth and assets for your children.
Keep Critical Documents Organized
Make sure to keep any documents that might be relevant to your financial legacy. Some common examples of relevant documents include:
- Insurance policy records
- Bank account statements
- Investment statements
- Deeds to property
- Beneficiary designations
- Business records — such as articles of incorporation
- Health care directives
- Power of attorney
Store this important information in a safe spot. It is important to speak with your children and other relevant parties about the location of these documents. In the event of your death, your loved ones must access these records on your behalf.
Speak with Your Loved Ones
Having honest and open communication with your children about your wishes for their future is vital. If your children are too young for these conversations, speak with trustee about your intentions for building your legacy.
When you need to consult with a skilled estate planning attorney in Orange County, California, contact OC Wills & Trusts. We will happily provide you with a complimentary consultation!