By FPA member A. Christopher Engle, LUTCF, CFP®, ChFC®
Last Updated: May 4, 2012
You are a great parent! You read to them every day, play hours of games with them, and make sure they eat nutritious meals. It seems that your whole life revolves around your children’s school and activities. Last year, you started a college savings plan and updated your life insurance to make sure they would be taken care of financially. You are all set, right? There is at least one more question to ask. Who will raise them?
In most states, if you don’t answer this question, a court will do it for you. It is unlikely that the court will know you and what you would have wanted for your children. Even though the court is obligated to consider a child’s best interests, its choice may not be the one you would have made. So while you have made some great financial decisions to ensure the care of your family, you may have left out the most important estate planning decision of all, the choosing of a Guardian.
While procedures vary from state to state, the most common place to name a guardian is in your Will. A properly prepared Will gives you an opportunity to nominate a guardian, but still may not cover all of the bases. For one, there could be a delay as the Will is validated by the court. What happens to the children in the days, weeks, and months until the Will is validated and the guardian is accepted? Why take the chance that they will be with strangers during a time when they will be upset from the loss of their parents? This is especially a concern if your chosen guardians live in a different state. In addition to the Will, it is a good idea to prepare a letter that provides a plan for your children in the short-term, until the long-term guardians in the Will are accepted by the court. Also, this letter should provide an explanation of why you chose the guardians so that the court is most likely to follow your wishes.
So now that you know that you need guardians for your children, how do you choose? Here some factors to consider:
- Consider someone who shares your values and parenting style.
- Do they have the availability of time and the willingness to serve?
- How is their health? Are they an appropriate age?
- How is their relationship with your children?
- Are they financially stable?
- Would your children have to move?
While it is your responsibility to provide financial resources for your children’s care, it is still important for your guardians to have some financial stability. Good parents aren’t necessarily good money managers. You may want to choose a separate financial trustee for your children to avoid conflicts of interest and provide an additional voice in your children’s care.
If you are married, it is very important that you are in agreement on your guardian choice. Naming different guardians could result in family feuds and costly court battles. Sometimes there is a temptation to name different guardians for different children. This may be appropriate for children from different marriages or vast age differences. In general, it may be better to keep brothers and sisters together to help in the transition to their life without their parents.
Once you choose a candidate for a guardian, sit down with them and discuss your decision and the responsibilities involved. Make sure they are willing to serve. Assure them that the financial resources will be available in addition to any additional support from other family and friends. Also, prepare some written instructions on how you would like your children raised along with your hopes and dreams for them. Are there family and friends that could have hurt feelings over your choice? If so, you may want to discuss your decision with them so that they understand your reasoning. Also, discuss other roles that they could play in the care of your children. Since life is full of change, name an alternate guardian in case the first choice is unavailable or has a change of heart.
Congratulations on taking the steps to plan for your children in the unlikelihood that you are not there to guide them. Given the importance and difficulty of these decisions, it would be wise to consult with some experts to help. An experienced estate planning attorney and financial planner would help you identify your needs and develop solutions to ensure that your children are cared for by whom you want and in the way you want.
FPA member A. Christopher Engle, LUTCF, CFP®, ChFC®, is a partner with Argus Financial Consultants in Grand Rapids, MI. Securities offered through LPL Financial, Member FINRA/SIPC.