Personal finance

PERSONAL FINANCES: Selection of the guardian of your children

Photo by Nienke Burgers on Unsplash

An important decision when writing your will is the appointment of the guardian of your minor children in the event of your death. The need to appoint a guardian is especially important if you are a single or surviving parent. Even when both parents are alive, a guardian must be appointed to protect the children if both parents die in a common accident. Many considerations must be taken into account when selecting potential guardians – this differs from bestowing the honorary title of godfather on a family member or close friend.

Throughout my career, I have found that the difficulty a couple has in agreeing on potential guardians for minor children is arguably the biggest obstacle to writing a will. No other decision comes close! Often, the only point of agreement between these couples is that there is no obvious choice. However, minor children need designated guardians. A choice must be made; some choices are better than others; and almost any choice is better than leaving the decision to the discretion of the courts.

Without prioritizing, some of the considerations when choosing a tutor include the following:

Lifestyle cut
When selecting a guardian, the person’s age and living situation should be a major consideration. Asking that a relative or friend raise your children is a pretty big “request”. Even though a potential guardian will probably have to adjust their lifestyle, there are stages in their life when taking on such a huge responsibility doesn’t make sense. If your children are in grade school or younger, selecting a potential guardian whose children are adults and out of the home would require them to make a major lifestyle adjustment. This is also true when naming a single person or a couple without children. Very often, appointing your own parents as guardians, while understandable, can place a very difficult burden on them. Depending on age differences, it may be appropriate for an adult child to be appointed guardian for younger siblings.

Location
Choosing a tutor who lives close to you is ideal. For a child who has lost his parents, losing familiarity with friends and school adds a lot to the trauma. Although location is a secondary consideration for a loving home, it can be a deciding factor when one is lucky enough to have more than one viable option.

Financial situation
Accepting guardianship of your children is an important responsibility; it doesn’t need to be a financial burden as well. As part of your estate planning, we often recommend that a trust agreement, administered by a trustee other than the guardian, be considered to provide for the direct expenses of your children. In addition, the financial situation of the potential guardian must be taken into consideration, especially when this person may have children of their own. For example, it would be inconvenient if your child has funds set aside for an education, but the guardian’s children will be struggling with student loans. There are many other situations where financial disparity comes into play and where thoughtful estate planning can offer solutions.

Depending on the financial situation, you may want to consider including in your will either a direct bequest, a separate trust or other financial provisions for the benefit of whoever qualifies and accepts the role of guardian of your child.

Other Considerations
Maybe you have a potential tutor who is the perfect choice in every way; this is the exception to the rule, and you are very lucky. An “acceptable” choice should not be confused with a perfect choice. In too many cases, the pursuit of perfection delays the drafting of estate documents where even an imperfect choice would be far better than leaving the decision to a judge.

So far I have referred to a potential tutor in the singular. Very often, the potential guardian is married or in a relationship. To protect you against the possibility of a divorce or separation, I encourage the appointment of a single guardian, because you would never want custody of your child to be in dispute. That said, appointing one or more successor guardians is a great idea because people’s lives are changing and the future is uncertain. Also, always ask a potential guardian for permission to name them in your will. Failure to do so, in my opinion, is a big mistake.

Your choice of a guardian for your children should be based on their ability to fulfill the role of surrogate parent. While appointing your children’s godparents has ceremonial significance, the practicalities and responsibilities of a guardian are far more extensive, requiring much more care and consideration.

Editor’s note: Rob Clarfeld, CPA, CFP® and resident of Great Barrington, has extensive professional experience helping people achieve their financial goals. The author does not provide tax, legal, financial or investment advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, financial and investment advisers before engaging in any transaction.