In my previous post I discussed the need and issues involved in naming guardians to care for your young children in case both mom and dad are incapacitated or pass away. In this post we will continue that discussion but focus on naming one or more guardians of the child’s estate.
A guardian of the child’s estate is responsible for managing the money and other assets that pass to the child from the deceased or incapacitated parents. As in the previous post, if either mom or dad pass away or are declared to be incapacitated, the other parent will continue to be the guardian of the child’s estate. However, if both parents are incapacitated or pass away it will be necessary to name someone to manage the money left to care for the children.
Like the guardian of the person, this person plays a vitally important role in the life of the child. While they may not have daily interaction with the child, they are responsible for making sure the assets that the parents left to care for the child are managed responsibly and are used as the parents instructed.
In some cases it is desirable to name separate guardians of the person and of the estate. This method tends to create a “checks and balances” approach because the guardian of the child does not have their “hand in the cookie jar” as they raise the child. On the other hand, this method can create the potential for conflict because the one raising the children must communicate with the one controlling the money and the money may not be quickly accessible in an emergency. For many families, the two roles are filled by the same person or persons.
If the parents established a trust for the children’s benefit, the guardian of the estate and the trustee should be the same person. In this case, the trustee will be bound by their fiduciary duty to carefully manage the money.
Here again, it is very important to pick a person whom the parents trust will manage their children’s money. Some of the considerations are:
- Is the person financially responsible with their own money?
- Does the person buy things impulsively or do they make careful decisions?
- Does the guardian follow directions well or do their own thing?
- Do the parents know the person well?
- Will the person act in the best interest of your children?
Thanks for reading.