By: Michelle L. Feinberg, Esq.
The most common obstacle parents of young children encounter when preparing their estate plan is the choice of whom they should name as legal guardian for their children. Whether the problem arises because the parents are not comfortable with any of their options, cannot agree on the same person, or want to avoid hurting the feelings of those family members not named, this issue can often cause parents to put off the preparation of their estate plan altogether. While this can be a daunting decision, it is critical that it be made by the parents rather than by the court. The last thing young children should face upon losing both parents is being the subject of a potential court battle.
We choose a legal guardian for her ability to raise our children in a loving environment, with values and philosophies most similar to our own. The legal guardian\'s primary role will be to act as a substitute for you, making daily decisions for your children\'s benefit. If the perfect candidate is not clear to you and your choices are few, you might consider the following in making your decision regarding a potential legal guardian in addition to the obvious requirement that she be a responsible, caring person:
If the legal guardian is married, is it a happy marriage? Already your children would be coping with great loss; imagine having to do so in a tumultuous setting. If the marriage is strong, you might consider appointing both spouses as legal guardians, so that if one does not survive until your youngest child attains the age of majority (eighteen years in Massachusetts), your children could avoid the further disruption of having to move to the home of a successor legal guardian.
Does the legal guardian have children? You may be more comfortable if she has experience with children, especially if you are pleased with her parenting style. On the other hand, if she has a few children of her own, depending on the ages of the children it may be burdensome for your children to move in as well. Overcrowding issues could be addressed, however, by giving the trustee of your trust the power to make distributions to the legal guardian to either expand her own home or to purchase a larger home to comfortably accommodate everyone. Additionally, distributions could be made to the legal guardian to pay for a nanny or cleaning service to help.
Where does the legal guardian live? Would your child be able to stay in the same school system, or at least remain local enough to visit with their friends and other family in the area? In some situations, it may be possible to have the legal guardian move into your home.
If you are fortunate in that any of your and your spouse\'s parents would make wonderful legal guardians for your children, consider their age and physical ability to take on this responsibility. In some instances it might be appropriate to name all grandparents as joint legal guardians, and to name one set of grandparents as the custodial legal guardians. By doing so, while the children would live with the custodial guardians, all grandparents would have a say in the decisions to be made for their grandchildren\'s health, education, social and religious involvement. The success of such an arrangement greatly depends on the relationship between the two sets of grandparents and their ability to work together. This situation could also be fitting, however, if the two sets of grandparents are not close, since naming only one set as legal guardian could effectively shut the other grandparents out of your children\'s lives. It is preferable to also name a successor legal guardian to act in the event that the legal guardian does not become or ceases to serve. Once you have found what seems to be the best candidate, be sure to discuss this with her prior to executing your will. You want to make sure that she would be willing and comfortable with such an enormous responsibility. Reassure her that there would not be any financial burden to her, as your children\'s needs would be met with the assets you would leave in a living trust for their benefit.
While the nomination of a legal guardian is perhaps the most important decision to be made, special consideration should also be given as to how your assets will be managed for and distributed to your children after you are both gone. You choose a legal guardian for his or her ability to raise your children in a home filled with love and compassion, using child rearing methods similar to yours. This person, however, may not also be your first choice to manage your assets that you are passing to your children. Unless a trust is created, parents cannot separate the responsibilities of rearing their children and managing their assets for their children\'s benefit between two or more people. Without a trust, it will be the legal guardian\'s responsibility to invest and distribute the assets to the children until they reach the age of majority. Even if the legal guardian has the business acumen to handle finances, it still may be preferable to name a separate person for this role in order to have checks and balances. The legal guardian can then work together with the trustee to make sure that the children\'s needs are met until the children turn eighteen. Thereafter, the children would interact directly with the trustee.
There are other advantages of incorporating a living trust as a part of your basic estate plan, rather than leaving assets outright to your young children:
Without a trust, parents cannot defer the ultimate distribution of their assets to their children beyond the age of eighteen. When a child reaches the age of eighteen the child is entitled to receive all assets that have passed to him directly through his parents\' wills. Considering that the value of these assets might include the proceeds from the sale of the family home and life insurance proceeds, the child could receive a very large sum of money at a very young age. By directing instead that the assets are placed in a trust upon the death of the surviving parent, the assets can be managed and protected for the children until an age chosen by the parents. While the trust continues, the funds are available to the children in the discretion of the trustee. Parents may put language in the trust to give the trustee guidance as to which distributions might take priority, such as providing for their education, medical needs, purchasing a home, starting a business, etc. The age at which a child\'s trust ends can be changed as the parents deem necessary to address issues that may arise, such as if the child finds himself in a less than stable marriage or has proven to be irresponsible with managing his own money.
Assets held in trust are protected not only from the child himself, but also from his creditors if he is sued. This is a powerful benefit of having your assets held in trust for your children. There is a similar, yet limited, protection from the child\'s spouse. It makes it easier to say \"no\" to a spouse when you have a trustee to \"play the heavy\". If the marriage turns sour, during a divorce the probate judge could take into account the value of the trust beneficiary\'s share, but the assets themselves could not be reached by the court. Other marital assets might be allocated to the spouse, however, to offset the value of the trust share.
If your child has special needs, additional planning may be required. Depending on your child\'s disability, it may be appropriate to state in your will your preference as to who might be best to serve as his legal guardian for his lifetime. As your other children get older they might be the best option to serve in that capacity. There are also other types of trusts that can be implemented such as a supplemental needs trust to provide for a disabled child without disqualifying him for government aid. When meeting with your attorney who specializes in estate planning, be sure to discuss any concerns you might have so that she can develop the appropriate estate plan to fit your goals.
The fact that the process of selecting a legal guardian may be difficult should not be an excuse for postponing the completion of your estate plan. The goal should be to make the best possible decision based upon the present available choices with the knowledge that your decision can be re-examined in the future. In this situation, any decision is better than none.