Discussions of estate planning frequently center around a family unit consisting of a husband, wife and one or more children, in part because that is the more typical situation and in part because the tax laws give more planning options to married couples. But not everyone is married, and single parents have their own unique set of estate planning con­siderations. Even among single parents cir­cumstances vary. For example, is the other parent of the children involved in raising the children? If so, who has custody of the chil­dren? Who will have custody of the children if the single parent is not around?

A single parent needs to consider many fac­tors when establishing an estate plan:

• How much financial help can the other parent provide for the children? If the other parent is deceased, how much
  and what type of financial assistance
  is provided in the deceased parent’s estate plan?
• Will either parent remarry? If so, will this have a significant impact on the financial resources available for
  your children?
• Will your choice of guardians for minor children need any special financial help in raising them?

Other Support

Assessing how much financial help the other parent might provide is a part of the more basic question: How much will be available to your children after you are gone? If you have been married more than once and have chil­dren from each marriage, the amounts may be different for the children of each marriage. If you want to treat your children equally, this information is important, and you may not always know it.

Can your estate plan include an equalization formula to distribute assets to your children? If the other parent survives you, applying the formula may prove impossible. Even if the other parent does not survive you, such dis­tributions can be difficult because, for your child to inherit from a deceased other parent, he or she may have to outlive a
step-parent.

Remarriage

What if you remarry? If you have a career and your new spouse will be a full-time homemaker and possibly a parent to new children, you will have divided loyalties.
You should not ignore the possibility of a second marriage.

Some planning techniques you may use while you are single, including irrevocable trusts and outright gifts, can affect a second mar­riage. For example, should you try to reduce your estate tax liability and put your life insurance into a trust for your children? What if you remarry and you are not insurable? How do you then provide for your new spouse’s welfare?

Obviously, you should not give so much to your children that you jeopardize your own retirement security. Also consider that you may want to provide for your new spouse’s retirement.

What if your former spouse remarries? If no provision is made in the divorce decree for insurance payable to your children, there may be a limit to the inheritance received by them from your former spouse.

Not using trust planning may result in your former spouse having direct access to your assets. For example, if you leave your estate directly to your minor children, your former spouse will have control as their guardian.

Guardianship

If you are widowed, or if the other parent clearly has no interest in raising your chil­dren, you will have the most important voice in choosing a guardian. Does the guardian you select need any special financial assistance in caring for your children? How large is your guardian’s family? Will a nanny or house­keeper be necessary? Is the guardian’s house large enough to handle your children in addi­tion to his or her own? If not, should you provide financial help within the framework of your estate plan to allow the guardian to move to a larger home or hire assistance?

If the children’s other parent is involved and wants an active role in rearing them, the other parent may become the children’s guardian. Do you want to provide any financial assis­tance, or do you want to hold your estate in limbo until the children reach the age
of majority?

Was your divorce or separation bitter? Will your former spouse play a waiting game to force your estate to be used to send the chil­dren to college, putting them at risk of being unable to go? You must decide whether to permit the use of your assets to send them to college. Depending on where your former spouse is living, sending a child to college may not be a legal obligation unless your divorce decree imposes the obligation.

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