Avoiding the Uncomfortable Decision

As a young parent, my wife and I made this decision fairly easily and comfortably. Now as a grandparent and approaching the final quarter of my career, I realize that we were rather flippant in making this decision.  We did take great comfort in knowing that we were one of the few who did make the decision, poorly thought out as it whas.  If you are a parent of minor children, or deeply care for someone who is, the uncomfortable decision of who should be named their children’s guardians in the event of their untimely death should be made.  If the decision has been made, perhaps an update may be in order.

While young parents may fail to grasp the concept of mortality, the importance of naming a guardian cannot be understated.  In the event of their deaths, a court will appoint a guardian.  More than likely, it will be someone they would not prefer.  Why not face this uncomfortableness now and have the peace of mind that your children will be in a household of your choosing.

There are numerous factors that should be considered when naming a guardian.  First and foremost is the financial status of the considered guardian.  Will that individual or family have the financial means to meet their new responsibilities?  Can they provide the lifestyle they want for their children?

A guardian’s income will decrease as they take more time away from work as they care for more family members.  A guardian’s expenses will increase as they will be incurring additional medical/professional fees, daycare/educational expenses, not to mention the additional moneys spent to melt two families into one.  Will this family have the financial ability to carry this new burden?  Life insurance is an excellent way to create this needed wealth that will be needed.  Have you considered this and adjusted your insurance needs accordingly?

Second, you should decide if the guardian is one person or a couple. If you want your brother as guardian, what about his wife?  A couple named as guardians would allow both to have the legal authority to access school records, attend parent-teacher conferences, and make medical decisions for the children. Problems surface when one spouse is running around taking care of these things, but does not have the other has the legal responsibility to handle these matters.

Third, you should decide whether to appoint a trustee.  You probably decided on a guardian because you feel they are the best for raising your kids as you would want them raised.  But, they may not be the best at handling money.  Guardians are tasked with raising their own kids and now yours as well, why burden them with the financial decisions as well?  A trustee will handle only the financial decisions.

The trustee will make unbiased decisions about your children’s money. Should the guardians be compensated? Should a new house be bought, or additions be made? If your children can afford a private school or college, but the guardian’s children do not have those means; should moneys be spent or not spent to maintain the new family’s harmony and avoid resentment?  A guardian may not make the best decision.  A trustee that is impartial can make those decisions that are in the best interests of only your children.

Last, these decisions should be revisited annually.  Financial situations of the guardian may change, but children’s needs will change for sure. A 5 year old may need the emotional security of a loving grandparent, but may not have those same needs as a rebellious teenager.  At some point in time, a child may feel the need to continue living in the same neighborhood, with the same friends, and going to the same school.  Is that need more important than living with a beloved aunt and uncle?  What are the children’s needs now and who is the best choice to care for them if something happens the next couple of years?

These are all uncomfortable decisions.  They are uncomfortable not only because you are dealing with your mortality but because you are taking so many emotional, financial, and legal matters into consideration.  A skilled legal and/or financial professional with the emotional sensitivity will guide you through these uncharted waters.

So take the time and energy and take on the uncomfortable and then enjoy all the burdens raising your family and take comfort in knowing that their rearing will continue in manner you have chosen.