If you are parents of minor children, one of the most important decisions you can make is who to appoint as the guardian of your children if you both should die or become incapacitated. It is natural for parents to struggle (and therefore postpone) with this very difficult decision. No parent wants to think about somebody else raising their children. To make matters worse, the individual that may be best for raising your children may not be the wisest choice for managing their finances for them.
Most parents include the appointment of a guardian for their children as part of their estate plan. A guardian is the individual who will have physical custody of your kids and raise them until they are adults. If your estate plan includes a trust, you will also need to name a guardian (also called a trustee) of the assets you leave to your children. The person you name to be the guardian of your children and the person you name as the trustee do not have to be the same person.
If the guardian and the trustee are the same person, it can have advantages and disadvantages. If you appoint one person to serve in both capacities, it makes the decision-making process simpler and less time-consuming for everyone involved. The downside is finding a person who is qualified to serve in both capacities. Is the person you want to raise your children capable to handle their finances? In other words, do you trust him or her enough to not only protect but also grow the assets? Will the person you appoint use the money solely for your children’s benefit?
It is important to note that if you include a trust as part of your estate plan, you have flexibility in deciding how each child’s inheritance will be handled. In other words, you can create your instructions for how, when and under what circumstances you want your children to receive their money from you. This may include requiring the child to reach a certain age, graduate from college, or reach some other point in life before receiving their inheritance.
When attorney Diane Anderson’s mother was 33 years old, she died in a plane crash. This sudden, untimely death was an emotionally overwhelming time for Ms. Anderson. She learned the difficult lesson that life is not promised to any of us. Contact The Law Office of Diane Anderson to protect yourself and your loved ones, especially your children.