Let’s face it. You were probably on your way to going somewhere with your spouse when a rather unpleasant thought popped into your mind:
“What if something happens to both of us unexpectedly during a trip or morning commute and we pass away? Who’s going to look after the kids? We talked about it but…what if? Shouldn’t we put something down on paper already?”
The answer is: Well, yes. Absolutely. You should put that down on paper – but not without some careful thought.
As one of the key estate planning attorneys here at Gurney Law Group, I’d like to map out some considerations for you so that you understand those critical steps and feel better about the decision on who will take care of your kids.
From a legal perspective, the first thing to keep in mind is if you pass but the other parent is still around, that parent is going to be taking care of the kids. There's no question about it, unless the individual has been incarcerated or had their rights terminated. As a rule, the other parent automatically is the one who takes care of the kids.
If that second parent dies after you, it's their will that's going to have a say over who takes care of the kids afterwards.
The biggest thing I like to encourage parents to think about in terms of a guardian is: How are they going to raise your kids?
- Are they going to keep them in your same religious faith?
- Do they have more or less the same values that you do, so that they'll raise the kids in the manner you'd want them to?
- Are they going to allow them the same kind of opportunities that you might?
- Are they physically capable of taking care of the kids?
It’s generally not a good idea to name someone who's 90 years old to care for a toddler. As a rule, you want to name someone that is preferably your age or younger, but certainly not too much older than you. If you name someone and they pass before you do, you may as well not have named anyone. If you don't name someone, then it's likely to end up being whoever comes forward and says, "I'd like to take care of these kids, Judge."
The Conversation With Your Potential Guardian
Now, I know this is not the easiest thing to bring up with someone, even if it’s a friend or family member you’ve known for decades – but I’m nonetheless surprised by how casual people can be with a topic so serious. So set the stage appropriately.
First, is this someone where you can go over to their house and spend an evening having a serious conversation with them? It’s not a conversation while you're playing poker or drinking a bottle of wine and watching a movie. No. Actually sit down and focus on the most important scenarios, such as, “What happens if I'm gone and you’re taking care of my kids? Is this something that you would be willing to do?”
That needs to be the first question.
“And, if you are willing to have that role, what do you think about (insert whatever is really important to you)?”
Figure out if their attitudes are compatible with the way you want your kids raised.
Naming Someone As Guardian Doesn’t Mean They Will Be.
A key phrase that will override everything that I’d like you to think about: In the best interests of the children.
A judge is required to make the best interest of the children their foremost consideration. They’ll have a deep interest in what the potential guardian’s relationship is to the children and their fitness to take care of them. This is always going to be an important consideration as the judge evaluates any kind of guardianship or custody arrangement.
Yes, the person named guardian of your kids will probably be the first ones the court will consider. As I’ve said, evaluating whether the move is in the best interests of your children will be of the utmost importance. The court will typically give preference to what the parents want, but that’s not a given if you name someone who has been in and out of prison for the last 20 years – in that event, the court is likely to decline your request.
At that point, if you named a backup guardian, the court will probably look at the backup. If you didn't name a backup, then they will likely start looking beyond who you mentioned and might need to get the State involved if appropriate candidates haven’t come forward on their own.
Thankfully, in the vast majority of cases, the named guardian by the parents will be selected, but you should be prepared with multiple backups, in case that first choice is not accepted by the court.
Access To Inheritance Money – Who Gets It, How Much And When?
Don’t assume that whomever you name as guardian is going to have instant access to the child’s inheritance. By default, they will not.
Therefore, we need to make a specific provision in your will or trust that designates that you do want this person to have access to funds so that they can raise your children. You can put various types of limitations on either how much you give them or what it can be used for. Typically what we do is craft a testamentary trust, which is a trust that doesn't exist until you pass away. It's created by the will.
A testamentary trust can be fairly simple. It states who the beneficiary of the trust is (such as your child) and until your child reaches a certain age, you have a trustee who is going to manage their inheritance for them. It also outlines what purposes the inheritance can be used for while it’s still in the trust. Anything that would go to your child instead goes to this trust and the person you name is going to manage it for them.
We can put conditions on what the money can actually be used for until your child gets full control of this trust. Typical uses for the money include health, education, maintenance, and support. They can use it for medical bills. They can use it for tuition or books. They can use it for rent. They can use it for food. They can use it for extracurricular activities, but they can't buy a Ferrari. They can't get thousands of dollars and go have fun in Las Vegas.
From a financial responsibility standpoint, you should also be asking this question about the potential guardian: Are they solid with managing their finances?
You want someone who knows how to manage money fairly well. They don't need to be a financial planner, but they cannot be consistently facing money problems and making irrational decisions with their finances. This might be a red flag and give you serious pause.
For example, let’s say you have a sister who is truly a wonderful, caring person that you’re very close to. You would absolutely trust her with your kids but....deep down, you know in your heart that she’s had some challenges when it comes to money. While she’d make a great guardian for the kids, she might not be the kind of person that you want as the trustee controlling their inheritance. Instead, you can pair her as guardian with your sister-in-law, who’s scared to death of kids but has been very successful professionally and knows the value of a dollar, as trustee.
At What Age Should Your Child Gain Control Of Their Inheritance?
This is actually a fairly big decision that I talk about with clients. Most people choose one of three “milestone” ages: 18, 21 or 25 years old.
The argument for 18 years old is that they're a legal adult. Here, you just want to give the money to them and don't want to micromanage their lives. If you want to do that, that's fine, but there’s a risk with giving your child access to substantial money at such a young and typically immature age.
Others will deem 21 years old as suitable, arguing that they have a few more years of maturity and perhaps might be in college. Yes, they’re a bit more mature, but keep in mind that 21 years old is also the legal drinking age. Here again, there is a risk is the child could spend a fair amount on alcohol – not a stretch when we’re talking about college-aged children.
That’s why I encourage clients who are parents to select 25 years old as the age that their child takes control of their inheritance. At this age, they’ve probably graduated and started a career of their own. They're out in the real world. They've had to manage things for a few years, so they probably know how to without automatically taking a sudden windfall and spending it on something frivolous.
The decisions about how you want your kids taken care of and assets managed aren’t ones that you should face on your own. Start with a free consultation at Gurney Law Group, LLC. Our estate planning attorneys will be happy to discuss how we can help you make these critical choices in a way that puts your wishes at the forefront rather than the State's assumptions of what you might want.