20 Dec Establishing Guardianship
Gathering with loved ones during the holidays is an ideal opportunity to address your primary estate planning goals. It may not be the ideal time, but with everyone together, it is a great opportunity to get things in order. A main priority is to ensure that minor children are cared for if their parents die young. Establishing guardianship within estate planning is imperative for future planning. Phelps Law (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 be certain all areas are covered for the best future possible.
Nominating a guardian for minor children (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 the child’s inheritance. For the child’s inheritance, you must choose separately whether the guardian also controls the money. For many parents, guardianship can be the most difficult estate planning decision. They must evaluate relationships, parenting styles, beliefs, locations, phases of life, etc. Here are a few more tricky issues to consider:
- Approaching the selected guardian: Pulling aside the selected guardian during a holiday party can lead to a meaningful and productive conversation. If that day ever comes, the guardian is less blindsided by the sudden change to their life. However, that conversation is by no means required. What if, a few years down the road, the parents nominate a different guardian? Should the parents inform the old guardians that they’re out? Not over Christmas dinner!
- Properly Addressing Contingencies: Let’s say the parents have settled on nominating a sister and her husband. Nominating both the sister and her husband as co-guardians will greatly simplify their role in raising the children. But what if the sister cannot serve when that day comes? Is the brother-in-law, serving alone, still the right choice? What if that couple divorces and the will is not amended? Work with an experienced attorney to be sure all contingencies are properly addressed in your Will
- Giving children and their inheritances to different sides of the family: Some worry that giving control of the children and their inheritance to the same individual vests too much power in one person. Segregating duties can work well, but may not be wise in every case. How do the mother and father’s families get along? If a guardian is nominated on the wife’s side of the family, but someone on the husband’s side will manage the money, the children may end up in the center of an unhappy battle.
Guardianship Planning Tips
Sitting down with an experienced attorney at Phelps Law can help work through these issues. From our experience, here are some brief tips to keep in mind:
- Planning the inheritance: Selecting a guardian is critical, but real peace of mind comes after also planning the inheritance. Parents should consult a financial advisor to secure appropriate life insurance. Parents should also establish a living trust to minimize the court’s involvement and avoid each child receiving their full share at age 18 with no strings attached.
- Annual re-evaluation: On an annual basis, parents should get in the habit of re-evaluating whether circumstances have changed and if they should consider nominating a different guardian.
- Don’t Delay: Don’t let this difficult decision delay the entire estate plan. It is better to have something down on paper, rather than nothing. In fact, signing your estate plan is a great way to test the decisions you made. If the issue keeps you up at night a month after signing, that’s a good sign you should amend the estate plan and tweak your choices (which is a simple process).
- Grandparents Can Help: Young couples tend to be short on time and money, so estate plans are often delayed. There is a deadline. While grandparents cannot execute an estate plan for their children, they can raise the topic at the next family event, explain the importance of preparation, and even help schedule a free initial consultation with estate planning attorneys at Phelps Law.
When establishing a healthy strategy for your estate plan, it is imperative that you be sure to include a guardian and specify the control they have over the minor child or disabled adult. This will protect assets and loved ones from unnecessary headaches in the future.
To learn about what is best for your future or to review your plan, contact Phelps Law today!
Images used under creative commons license – commercial use (12//2017) Melissa (Flickr)