While carrying an appropriate amount of life insurance is important for anyone with dependents, it is vitally important for the single parent. The single parent is the last line of defense between the dependent and chaos, so it is imperative that his/her affairs be in order.
In a two parent family, the survivor can be there to potentially pick up the pieces and soften the blow. I say potentially because that isn’t always the case. Sometimes, the accident that kills one parent leaves the survivor disabled. But in almost all cases, the dependents are better off with a surviving parent than without one.
I bring this up because last week I wrote a policy on a single parent who recently adopted a little girl out of foster care. She was referred by her neighbor who understood that the little girl’s life had the potential to become even more chaotic should the woman who adopted her die.
The neighbor also explained to her that in addition to the life insurance, it was equally important to have a will drafted, which she is in the process of doing. How fortunate she and her daughter are to have such a knowledgeable and caring neighbor.
Once the life insurance application is approved and the will is executed, this single mother’s affairs will be in better shape than probably 50% of married couples.
While I’ve done no formal survey, I use that percentage because at least 50% of the couples I meet haven’t had their wills prepared. And as I’ve said many times, everybody has a will; you either have the one you’ve had drafted or the State’s (via its intestacy laws).
The same reason people fail to address their life insurance needs I suppose is why they fail to draft a will, that is, the unpleasantness of addressing the temporary nature of life. But that is just shifting the problem to the survivors.
When a person dies intestate, the court will appoint an administrator to close the estate. But the administrator, even if it is the surviving spouse, may be required to post a bond, although the court has the option of waiving it.
The reason the surviving spouse could be required to post a bond is because, at least in New Jersey, he/she may not necessarily inherit the deceased’s entire estate. The surviving spouse is entitled to the first $50,000, but only 50% of the amount over $50,000, with the other 50% going to the children. If there are no children, then the other 50% goes to the deceased’s parents. Only if the couple is childless and the deceased’s parents are also deceased does the surviving spouse get everything.
The complexity of the probate process/laws should be enough to convince everyone, not just single parents, to have their will drafted. And to make sure their life insurance program will do what is wanted.