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Choosing and Preparing Guardians
It may be the most dreaded thing for parents to contemplate. Who would raise their children if both parents died?
The most important piece of advice: if you do not have a last will nominating a guardian for your minor children, get it done immediately. The court will decide who will raise your children if you fail to make that decision in a will. Family members are not always selected, and the children find themselves in foster care if a custody battle between family members erupts.
Who is Best Suited to be Guardian?
A knee-jerk reaction is to name grandparents. However, do the math, and you may find that decision is usually not realistic. Will they be able to care for active young children or handle the many challenges of caring for adolescent children? We have three grandchildren who we love unconditionally. When they are teens, we will be in our late 70s. Having raised our teenage children, I know it is a time that demands significant attention and vigilance.
Good candidates are often siblings or close friends who are parents with shared values. I am from a family with eight children, and Margie is one of ten children. We had lots of potential candidates and, for years, stalled on signing wills because it was a topic that led to difficult conversations. We finally figured out that, although we could quickly agree on who would be guardian, we could easily agree on who not to name. That left with a narrower pool of choices and highlights the danger of not signing a will: if you fail to make a decision that is binding in your will, a person you would not select could easily end up as the choice.
It would be ideal to have the children remain in familiar surroundings. However, if this is impossible, then a loving home with adults who can provide stability and support is better than a second choice in your hometown. As children age, the geographic proximity also may cause you to reconsider your guardian choice. Children become less portable as they age: moving a child to a different area is much more difficult in high school than while in grade school.
Have a successor guardian and a third alternate successor nominated in your last will. Health or other circumstances could arise, preventing your first choice from being able to serve. If your first choice is unwilling or unable to perform, having a second and third choice avoids having the court decide.
The Guardian and the Trustee
A guardian provides custodial care. The trustee oversees the inheritance of your minor children. One person (or a couple) can serve in both roles in some cases. However, this is not always the case. Someone might be great with kids and bad with money. If you separate the functions, consider whether they can work together.
What are the Trustee Responsibilities?
A trustee needs to put the needs of beneficiaries above their own. Parents who own their homes and have one or more life insurance policies require a fiduciary who can manage several hundred thousand or even a million dollars for two or three decades, depending on the age of the children.
If you have more than one child, we design the trust to serve them as a pooled, or “Common Pot” trust, so their various needs can be met. Our three children are four years apart. By the time our youngest son started college, our older two had graduated. It would not be fair to divide the asset into thirds because he would have had to pay for college himself had we died then. Instead, with a common pot, all the funds are held until the youngest achieves what you want to define as adulthood.
When does a child get uncontrolled use of the inheritance? The older I get, the older I think it should be.
While children are legally permitted to inherit wealth when they come of age, few 18-year-olds are ready. Because many newly minted young adults do not have the financial experience and maturity to inherit in a single lump sum, trusts are often created to control the inheritance until they are old enough to manage a significant amount of money. Some parents choose to stagger the distribution of the distribution in fractional shares upon attaining certain ages. For example, they may have one-third distributed at age 25, then one-half at age 30, and the balance at age 35. In addition, trusts can also include “incentives” to encourage positive behaviors, like graduation from vocational training or college.
What Happens to the Family Home?
If the plan is to have guardians live in the family home with the minor children, the house could be held in trust for the benefit of the children. Will it be sold or kept in the family? Either way, a plan for maintaining the home and its eventual disposition can also be included in your last will.
How Can You Instruct the Guardian and the Trustee?
Your documents should address the unique circumstances of your children with the guidance and detail as deemed reasonable. In addition to a last will and trust, write a “letter of instruction” to the guardian to explain your minor children’s personalities, preferred foods, best friends, bedtime habits, etc. You can revise this letter from time to time, as appropriate.
Final Words
Most parents live long enough to see their children grow up and have children of their own. However, bad things do happen. Having an estate plan to prepare for the worst-case scenario does not make it more or less likely. However, it can help you protect everyone you love and everything you have.
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