One of the most important steps a single parent can take to protect his or her child is to plan for the unexpected.
I don’t point it out often, but the fact is that one of the primary services offered by the Law Offices of Max Elliott is helping people plan for the day they die. Nobody likes to think about this, let alone talk about it, especially parents – moms and dads. Given that challenge, consider the following true story (with identifying characteristics changed):
Molly and Sheldon had been dating for a couple of years but weren’t ready to get married. Sheldon was a struggling actor and Molly was fresh out of college. However, circumstance resulted in Molly having Sheldon’s little girl, Amy. Sheldon and Molly decided against marriage or entering into a Civil Union but both loved Amy dearly.
One day while returning from work, Molly was killed in a car crash. Fortunately, she had life insurance. BUT…
1. She listed Amy as the primary beneficiary with no further instruction.
2. She listed Sheldon as the contingent beneficiary with no further instruction.
3. She didn’t tell her only other remaining “next of kin” about her “final wishes.”
Molly’s body was sent to a funeral home selected by her only remaining next of kin, who could not afford to pay for the funeral services but, when meeting with the funeral home director and Sheldon, mentioned the life insurance policy. The funeral home agreed to perform the services that week only if they could be guaranteed payment through the insurance proceeds. For this to occur to the satisfaction of the funeral home, Sheldon, who was on Amy’s birth certificate, would still have to go to court and agree to open an estate for Amy and a lawyer, referred to Sheldon by the funeral home, would have to be named trustee.
The bottom line: If Sheldon didn’t want to take the funeral home up on its offer, during one of the most challenging times of a person’s life, I might add, he had to find the money elsewhere within 24 hours.
Taking the funeral home’s offer meant:
- Retaining an attorney that neither he nor Molly knew to represent their little girl.
- Designating an attorney neither he nor Molly knew to be trustee for their little girl’s sizable estate at least temporarily; and here’s the other burn…
- Paying thousands of dollars of little Amy’s money to an attorney and a funeral home in order to hold Molly’s services within a reasonable time.
This is a grim, real life story but I implore you to take and pay forward the critical lessons:
- DO NOT designate minors as primary beneficiaries of life insurance policies, retirement accounts, and the like.
- DO communicate to your loved ones your final wishes, so you and your loved ones won’t be held hostage.