NOSM member Erin E. Reynolds, a financial consultant and money management expert would like to see more information on handling finances for single mothers. She recommends getting life insurance and preparing a will to protect your children. With her help, we will address money issues on a regular basis in SM.
One of the best reasons to get life insurance is for the peace of mind it will bring you when you realize you are preparing for your children's future. A will is important to protect their assets, particularly from a birth father who may show up at the opportune moment. Even better is a living trust. Here's why:
- Living trusts avoid probate, where a conventional will requires it. The probate process lasts up to two years and can cost up to 8% of your estate (your estate can be your life insurance or any other assets.)
- Living trusts are private, where a will or a trust under a will is public record.
- A living trust is rarely contested. Because it's difficult to challenge, disappointed relatives such as your child's father, will unlikely be able to get his hands on the money.
- Living trusts cost more than wills, but are worth it in the long run. Costs in creating this kind of trust are tax-deductible, plus, there are no annual court accountings and the legal fees that go with them.
- A living trust allows the trustee to collect life insurance immediately without court delays.
- A living trust gives you control and is created, activated and managed while you are alive and well. Moreover, it is portable meaning you don't have to revise it as you would other types of trusts if you move to a different state.