Why estate planning should be at the top of every single-parent’s to-do list

If you’re a single parent, you will no doubt be juggling many different priorities, and your estate planning should be one of them. Having a professionally drafted Will in place is a fundamental step in ensuring that your children are provided for financially and have people in place to care for them if the unexpected happens to you.

A tailored Will should set out your wishes regarding who will raise your children in your absence, how you would like them to be raised, and how your assets will be distributed to support them.

This article provides a broad overview of the importance of having a professionally prepared Will and Superannuation Binding Death Benefit Nomination in place, and the factors you should consider as a single parent when considering your estate planning, whether this has been the case since your children were born, or you have recently separated from the other parent.

What is a Will?

A Will is a formal document which sets out how your assets are to be distributed to your loved ones upon your passing, and who is appointed to carry out those directions (referred to as your “Executor”).

Importantly, a Will can also include wishes as to who should be appointed as your child or children’s guardian while they are under 18 years of age.

Having a tailored Will in place is crucial for single parents, as if the worst were to happen and you died without a valid or up-to-date Will, you would have no control over how your children benefit from your Estate, who would look after them, and your wishes regarding how they should be cared for.

What is a guardian, and who would care for your children?

A guardian is a person who is given the legal power to make lifestyle and parenting decisions for a person who is unable to make decisions themselves, such as a child.  The role of a guardian is to protect the interests of a person who lacks the legal power to make their own decisions, to make sure the person is appropriately cared for, including ensuring that the person has a safe place to live, that they attend school, that they are protected from harm, and that they are living in a healthy environment.

In your Will, you can nominate a guardian for your child or children if you and their other parent or carer died or were unable to provide appropriate care.  It is important to note that in Australia, there is a presumption of equal shared parental responsibility, meaning that if one parent dies, generally the surviving parent takes sole parental responsibility for any child or children left behind (unless to do so would put at risk the safety or welfare of the children).  In the situation where both nominating a guardian in your Will is vital to ensure your wishes are considered in appointing a person to make parenting decisions in your stead.

Nominating a guardian can be a difficult decision, as the guardian will ultimately have the responsibility for raising your child or children and will be responsible for making decisions about their health, medical treatment, education, residence and other day-to-day considerations.

Who can be a guardian?

You can nominate anyone to be your child or children guardian, as long as that person is over 18 years of age.  You can also nominate multiple guardians who will have shared responsibility for caring for your child or children.

If you do not set out your wishes regarding who should be appointed as guardian in your Will, a close relative or next of kin can apply to be appointed as their guardian, however, this appointment may not align with your or your children’s’ preferences.

Statement of wishes regarding your children’s care

In your Will, you can also include a statement of wishes, providing guidance to your children’s guardian regarding where you would like your child or children to live and go to school, how decisions about their health, wellbeing and lifestyle should be made, and how expenses for your children should be paid.

You can incorporate a statement of wishes into your Will, or prepare it as a separate document that is then kept with your Will.

Your Will following separation

It is also important to be aware that separation from a partner or co-parent does not automatically change or impact your Will, or who would benefit from your estate upon your passing. If you have a Will prior to separation, and you do not formally divorce (or were in a de facto relationship), your Will remains valid, likely continuing to benefit your former partner if you die without updating it. Further, if you die without a Will, and are separated but still legally married, the laws which determine the distribution of your estate in the absence of a Will provide for substantial benefit from your estate to your former partner, regardless of the separation.

Superannuation and Insurance – having a nomination in place

Your superannuation and life insurance benefits will not automatically be distributed in accordance with your Will, as superannuation is treated differently to other assets like properties or money in the bank. The best way to control how these benefits are to be distributed is by completing a Binding Death Benefit Nomination specific to your superannuation fund.

A Binding Death Benefit Nomination is a document that sets out who will receive your superannuation and / or life insurance benefits in the event of your death.

Generally, you can direct the benefits to your children or your Legal Representative (e.g. your Executor), who would then distribute such benefits in accordance with your Will.

Without a Binding Death Benefit Nomination in place, the superannuation fund and / or insurance fund would have the ultimate discretion as to where your benefits will be paid, and when payment is made (ie. to your children at 18 years old), which may not align with your wishes.

How we can help

At Coulter Legal, we provide tailored and personalised estate planning advice that will ensure your Will is legally binding and effective in protecting your wishes and the best interests of your children after your death.

If you would like to discuss your estate planning further, please contact us on (03) 5273 5273 to book an obligation-free consultation with one of our specialised Wills, Estates and Succession Planning lawyers, or get the process started anytime of the day or night using our online Settify platform.