Douglass sanctions this plan: â€śIf youâ€™re looking to preserve wealth, you should put everything you own into a trust instead of leaving it outright to your children.â€ť This process puts a trustee over the inheritance to better ensure that assets are distributed and spent wisely. Trusts donâ€™t have to cost a fortune to set up. Broussard says some attorneys will work with clients on a sliding pay scale. She also suggests pre-paid legal services for single-parent households with lower incomes.
Diversify Insurance Policies
Rodgers has term, whole life, and variable policies to ensure stability. A term policy is set for a period of time, either 10, 20, or 30 years. Once a single parent is able to afford more insurance, it is recommended that she diversify with whole life policies that can be universal (fixed rate of return) or variable (rate of return based on market fluctuations).
â€śIf a person has more to spend per month, then I suggest a blended scenario with a longer term and a whole life policy that continues to build cash value,â€ť says Robertson. This scenario would provide cash upon death to children while they are still young. After the term policy expires, the mother would still have cash value from the whole life policy that she could access during her entire lifetime.
â€śI donâ€™t want to see people with a $10,000 or $25,000 policy anymore,â€ť says Robertson. â€śYou need a minimum of a $500,000 or a $1 million policy; thatâ€™s how you create a legacy and wealth preservation.â€ť Obtaining the proper insurance is a simple step that can make a big difference in your wealth plan. â€śLife insurance is the easiest way to preserve wealth,â€ť says Michelle Oliver, president of the Oliver Financial Group.