In Michigan, estate planning for newly single parents can present many complexities and emotional challenges. However, after losing a spouse to divorce or death, single parents must ensure that their children are cared for. A trust can provide many functions that lay the groundwork for a child’s daily care and financial support.
Trust basics
When single parents establish a trust as part of their estate planning, they need to answer basic questions that could become emotionally difficult. In most cases, the parent establishing the trust feels the other parent is the best guardian for the children. If not, the situation requires more care in establishing plans for the children’s future guardians and best interests.
The parent should consider who will perform the daily tasks of caring for and feeding the child and providing them with a comfortable home. The parent also needs to decide how much money they would ideally want in the trust and how they would want it used.
Purpose of the trust
Trusts are a useful, flexible estate-planning tool, and a parent can set them up in a multitude of ways. At a high level, the decisions for the trust can center around a parent’s desires for their child’s future, such as enforcing financial and educational discipline. The trust can dictate terms regarding how much money the child gets if they attend college, guidelines that enforce responsible spending and other terms.
Some parents may structure the trust to give their child almost complete discretion over how to spend the funds, although children cannot legally control any funds or assets in the trust until they reach 18 years of age.
Instructions to the court
A trust provides single parents the peace of mind that comes from knowing that their wishes will be honored. The trust document tells the court the parent’s expectations for their child’s care. It defines which adult should carry out the parent’s wishes and who can continue influencing the child’s life. The trust allows the parent to name their intended guardian and a backup guardian if the first person cannot or will not fulfill the role.
The trust can also detail who has visitation rights and who can keep the child for extended visits or take them on vacations. It also defines who makes major decisions in the child’s life in areas such as schooling, medical care, sports and activities. When single parents establish a trust for their child, they provide crucial financial support and guidance for the child’s future.