Choosing a Guardian for Minor Children

Choosing a Guardian for Minor Children

One of the most important aspects of a will involving children is the need to appoint a guardian who will take care of the children in the event of the death of both parents. Following are some comments to help in the process of considering such a choice:

1. The first step is for each parent to prepare a list of possible guardians with each candidate rated by their degree of responsibility, accessibility, geographic location, lifestyle, moral tenets, parenting views and personal compatibility with the children. Other factors to consider are the candidate’s ages, whether they have children, and the ages of their children.
2. The parents should compare their lists to see if there are any guardians they both selected. Additionally, they should discuss every person on both lists. What occurs sometimes is that the discussion centers in on one person rather than all of the candidates on the lists. .
3. Meetings and discussions with the potential candidates are essential before the final selection can be made. Parents should learn about the potential candidates’ willingness to become the children’s guardian, their projected short and long-range plans, and viewpoints on issues that are crucial to the parents.
4. Guardians should be selected after satisfying all concerns and after serious discussions between the children’s parents. It would be wise to choose an alternate guardian or guardians should the primary guardian become unable to fulfill the assigned duties of caring for the children.
5. Meetings with the selected guardians should be held on a periodic basis and should include the children. These sessions will provide a forum to elaborate on the current needs and plans for the children. The meetings will also permit the potential guardians to voice changes in their own lifestyle that might have a dramatic impact on the children. This may cause a change of the guardian based solely on indirect or unsaid impressions imparted and conveyed during these sessions. It would also give the potential guardians and the children opportunities to become familiar with each other.
6. An instructional letter or memorandum should be prepared for the guardians if it becomes necessary for them to assume their duties. This letter or memorandum should be an updated list of important, helpful details in providing for the children’s well-being. The details should include the children’s favorite foods, allergies, medical requirements, family medical history, personality traits and behavior responses. Personal opinions should also be stated on areas of personal discretion including spending allowances, dating, education, driving and drinking.
7. The will should specify which assets and the amount that should be placed in a trust with a trustee given the power to disburse them as required by the guardians for the care, maintenance, health, education and general well-being of the children. This trust will insure that essential assets needed to support the children can be used immediately without any court restrictions. This trust will expire at such time as pre-chosen by the parents in their will. An alternative to using the will would be a living trust.
8. The children’s financial security and standard of living will be determined by the guardians, trustees and most importantly, by the parents’ planning. The parents must provide direction as to the spending of funds to achieve their desired short-range and long-range goals. The guardians and trustees need to be provided with instructions of which goals have priority. For instance, are short-range goals such as a car or a vacation in Europe more important than long-range goals such as a college education or a nest egg for a future profession, business or house?
9. Day-to-day spending needs of the guardian can be provided for by establishing a monthly minimum allowance to pay the guardians. The parents should review the initial monthly amount periodically to see that it is still reasonable. Once the parents die, this amount will then be set. Afterwards, the trustee can be provided with the power to increase the monthly allowance to meet predetermined specified spending goals or to simply adjust for inflation.
10. The monthly allowance will give the guardians the freedom to budget and plan their new responsibility without having to account to the trustee. In the event additional funds are required by the guardian, requests can be made to the trustee. Further, at that time, a discussion with someone knowledgeable or financially independent might be in order.
11. The ability to maintain the monthly allowance is directly related to the liquid earning power of the remaining available assets. The parents should analyze the earnings and cash flow potential of the assets when drawing up their will in terms of after tax funds available for the guardian. An important consideration is that this earning power could sharply decline should the assets be substantially depleted to achieve a spending goal. Needless to say, much care should be used in projecting future cash flow as well as future budget requirements.
12. In addition to the monthly allowance, the will or trust could specify which items of care the trust should disburse without question by the trustee. This might include lessons, schooling, certain trips, religious instruction, and private tutoring.
13. If there are provisions for delayed distributions of the principal and interest to the children, the will or trust should state when distributions of income and principal is to be made as certain ages or stages are attained.
14. The parents also have to designate the point when the monthly payments to the guardian would cease. I suggest they stop one year after the youngest child graduates college or the child is honorably discharged from the service, moves out of the guardian’s house or turns 24, whichever occurs first.
15. We do not advise making the guardians the trustees. A trustee should have no interest in the funds other than to see that the parents’ wishes and desires for their children can be attained and will be followed.

Reprinted from Getting Your Affairs in Order by Edward Mendlowitz, CPA ©2012. Available for sale at www.Amazon.com and www.BN.com .