One of the most difficult decisions that parents of minor children have to make when creating their estate plans is choosing the person(s) they would want to raise their children if they were incapacitated or suddenly passed away.
In our office, we often find that the conversation starts with, or eventually winds its way back to, the issue of money. Parents know better than anyone just how expensive raising a child can be. They also realize the burden that “inheriting” a child (or multiple children) can be on a guardian who is not financially prepared for the responsibility.
It leaves parents to stress over who in their close circle could offer the most “financial security” for their kids if they were to suddenly pass away. Certified Elder Law Attorneys like myself are usually happy when this debate happens in our presence because we have a chance to offer a different perspective to the conversation and provide additional options.
The truth is that with proper legal planning, parents can ensure that there’s enough money set aside for their child(ren)’s care, regardless of who takes over as the legal guardian. Taking out a life insurance policy and leaving the proceeds to a trust for the benefit of the children is one way to accomplish that goal. The parents will be able to choose a “financially savvy” trustee who can oversee the money in the trust, which frees them up to pick a guardian who would raise their kids with values and parenting styles that are important to them.
It’s also possible to name more than one guardian, perhaps one who is personally responsible for raising the kids and another guardian who is responsible for making financial decisions. Parents can even choose separate guardians for each child. This may be appropriate if there’s a significant age gap between the children… say, for example, one is sixteen and the youngest is five. The 16-year-old may wish to live with an aunt while the five-year-old would be better cared for by a grandparent. Parents can have the flexibility to make those decisions when money is not the sole focus of the discussion.
The bottom line is that sometimes the most “financially responsible” person in your circle is not the person who would offer the most loving and stable upbringing for your kids if you were not around to raise them. The good news is that you work on creating your own financial safety net for your family so that your guardian can simply focus on providing your kids with the attention and support they need during a time of grief.
If you haven’t named guardians for your kids and this article has opened up new ideas and possibilities that you haven’t thought of before, we’d be happy to sit down with you to work through all of your options. To schedule an appointment with our guardianship lawyers, simply call 724-841-1393.