Guardian Selection Requires Planning

If you have children, you probably have designated them as the primary or contingent beneficiaries of your estate planning. But, if your children are minors, the estate planning shouldn’t stop there. Minors cannot control their inherited property before reaching the age of majority (18 in most states) because they lack the legal power to enter into a binding contract. You need to plan for what will happen if your child inherits property while he or she is still a minor. Consider naming guardians not only to raise your minor children but also to manage their property in the unfortunate event you and their other parent both die while they are still minors.

In many states, if one or both parents die without a will, the children will inherit property even if they are minors. In a case like this, a guardian is often appointed to administer the assets for the benefit of the minor children until they reach the age of majority.

Making the Right Decision

The appointment of a guardian and the administration of a guardianship estate for a minor can be quite costly. The cost may be lower if all surviving family members agree on who will act as guardian. If you fail to specify your wishes prior to death, state law or the courts may dictate who will act as guardian. There are instances, however, where your decision may be overridden. In New York, for example, the court ultimately decides who will be the guardian.

To help the court decide who should be appointed guardian, be sure to nominate an individual or individuals to act as guardian for the property and person of your minor children in the event of the untimely death of both parents. The will may go beyond merely naming the guardians. For example, it may provide detailed instructions to the guardian as to education, healthcare and support expenditures so that the guardian can adhere to your wishes. A detailed provision regarding your wishes can help prevent unforeseen conflicts or mistakes during the administration of your estate.

You may also want to consider making a bequest to the guardian, either as compensation or merely to cover the time and expenses involved in fulfilling his or her duties. Distributions to the guardian could be made at the discretion of a trustee or as a lump amount. However, relying on the trustee’s discretion might become problematic if a situation arises where the trustee does not want to make a distribution but the guardian feels one is necessary.

You may want to name a relative or friend and his or her spouse to act jointly as guardians for your minor children. Make sure you consider who you would want to act as guardian if the couple divorces or one spouse passes away.

Planning Ahead

Before executing your will, sit down with your proposed guardians and discuss whether they would be willing to act and follow your wishes. Knowing that the potential guardian will act in your child’s best interest should help you feel comfortable with your choice of guardian.