Estate planning is one of the most important decisions you’ll make in establishing the future wellbeing of your family. If you have young children, choosing individuals to care for them when you’re no longer around provides you with the peace of mind in knowing that their needs will be met.
Appointing guardians and trustees for young children requires that you understand the difference between the two. This gives you the information you need to make the best choices for your loved ones.
Considering the Future of Your Children
If you’re a parent of young children, you’ve probably considered what might happen if you and your spouse were no longer around. Who would take care of them? How would their finances be managed?
These are just some of the questions that you need to consider when planning for the future.
In most cases, if a single parent dies, the other parent is appointed as the sole guardian of the children. In cases where both parents are deceased, the courts will determine who should be appointed as the guardian for the children and any related property.
The Role of a Guardian
Before appointing a guardian to your children, you should consider some key factors. For example, it’s best to choose an individual who can provide the necessary care for your children until they reach the age of 18 years old.
Also, an appointed guardian should be able and willing to provide the educational, religious, and social environments in which you want them to be raised.
Parents should consider any relocation that may be required in order for a guardian to care for their children.
Parents may appoint an alternate guardian for their young children. This is useful in cases where the first person chosen is unable to take on the responsibility as outlined in your estate planning.
The appointed guardian should be given all of the details related to your preferences in raising your children. The more information you provide, the less confusion there will be.
Appointing a Trustee for Young Children
It’s a good idea to choose a different individual to serve as a trustee. Although a guardian may be the best choice to provide the care you want for your children, he or she may not be the right person to manage their finances or property.
A trustee has the ability to hold any inheritance left to your children in trust. Trustees manage this fund and use it to pay for educational, medical or other needs.
Trust funds are usually transferred over to the child once he or she reaches a certain age. Before that time, a trustee ensures that the assets in a trust are managed according to your wishes.
Co-trustees may also be named. This is especially important in cases where there is a significant inheritance. CPAs and financial planners often serve as co-trustees, as they have the expertise to provide the guidance your family needs for long-term protection.
So it’s a good idea to appoint different individuals as trustees and guardians for your children. The guardian provides for the health and wellbeing of your young children while the trustee manages the terms of their trust and important financial decisions.
Understanding this distinction helps you determine who the best people are to fill these roles. By taking the time to consider these and other aspects of guardians and trustees, you’ll make the best decisions for the future of your children.