Each year as the holidays approach, we treasure the joy of celebrating with our extended relatives and our immediate family members. It’s a time to reflect on the richness of family as we consider the past and look to the future. In order to assure our immediate family is well cared for, it’s a good idea to be certain that plans have been made for children who are minors, in the unexpected event that their parents die young. Phelps LaClair (serving Scottsdale, Gilbert, and surrounding areas in Arizona) is able to provide an excellent foundational structure for putting your estate plans together, and goes above and beyond, to see that your family experiences the best possible future in succeeding generations.
Establishing guardianship within estate planning is imperative. Nominating a guardian for children who are minors (or adult children with special needs) happens in each parent’s Last Will & Testament. Guardianship gives authority over the child’s life and medical decisions, but not over the child’s inheritance. If a guardian is to be given charge of a minor’s inheritance, that stipulation must be made separately when establishing guardianship. For many parents, guardianship can be one of the most difficult estate planning decisions they’ll make. Many aspects need to be considered, including relationships, parenting styles, beliefs, locations, phases of life, and more. Here are some of the factors to consider in the process of establishing guardianship:
- Approaching the selected guardian: Pulling aside someone you’ve selected as a guardian during a holiday party might not be the best time to open up a deep conversation about decisions that could impact and change their future forever. When you’ve chosen a guardian or guardians, sit down with them and discuss your plans together. Talk to the proposed guardian(s) openly, and consider together what guardianship should look like for everyone involved. When you do sign paperwork naming them as guardian, stay in relationship with them. And if, in a few years you decide to change guardian(s), you’ll need to have another honest, heart-to-heart conversation about the changes you’re making in a way that carries your relationship forward into the future.
- Setting Up Proper Contingencies: Guardianships should be carefully thought through at the time of initiating the paperwork, so that problems like these three scenarios can be avoided:
- Scenario #1: A sister and her husband are nominated as the guardians to your children. But when the unexpected day comes, your sister can no longer fulfill her role as guardian. Now your brother-in-law must serve alone. But is willing? And equally as important, is he capable of fulfilling guardianship alone?
- Scenario #2: A sister and her husband are nominated as the guardians to a child. A few years later the sister divorces, but the paperwork for guardianship is never amended. Now there are two guardians who are no longer living in the same house. Are they on speaking terms, or will there be a struggle every step of the way when it comes to caring for the child?
- Scenario #3: The guardian for a couple’s child is nominated from the wife’s side of the family. But a member of the husband’s family is appointed to manage the child’s money. Unfortunately, the families of the deceased wife and husband do not get along. As a result, the children are embroiled in a painful, unhappy battle for years to come.
Guardianship Planning Tips
An experienced attorney at Phelps LaClair can help you avoid all of the above issues and prepare wisely for guardianship. From our experience, here are some brief tips to keep in mind:
- Planning the inheritance: Selecting a guardian for a minor is critical, but real peace of mind comes after planning for that minor’s inheritance to be wisely allocated. Parents should consult a financial advisor to secure appropriate life insurance, and also to establish a living trust. A living trust will minimize the court’s involvement, and it can also avoid the cashing out of the full inheritance when the child turns eighteen. That’s an important factor, for example, if heirs are not yet adequately mature in handling finances, or if others around them have undue influence that could impact their making wise financial decisions.
- Annual re-evaluation: On an annual basis parents should plan to re-evaluate whether circumstances have changed, and whether a different guardian needs to be appointed.
- Don’t Delay: Don’t let this difficult decision delay the entire estate plan. The unexpected is just that: unexpected. That’s why it’s important to prepare beforehand for the unforeseen. Even if you’re not one hundred percent certain of the choices you’ve made for your estate plan, it’s better to get something in writing than to avoid taking steps in the securing of your financial future. And if, after signing the paperwork, you find yourself not sleeping at night because of some of your estate planning decisions, it’s probably a good sign that your plan needs to be amended (which is usually not a complicated process).
- Grandparents Can Help: Young couples tend to be short on time and money, and their estate plans are often delayed. And while grandparents cannot execute an estate plan for their children, they can raise the topic in discussion and explain the importance of preparation. And, they can help their children to schedule a free initial consultation with estate planning attorneys at Phelps LaClair.
When formulating a healthy strategy for your estate plan, it is imperative to include a guardian and to specify their responsibilities for children who are minors, or for disabled adults. This will protect assets and loved ones from unnecessary difficulties in the future. To learn about what’s best for your future, or to review your plan, contact Phelps LaClair today!
Images used under creative commons license – commercial use (12//2017) Melissa (Flickr)