Estate Planning for Child Guardians: Ensuring Your Kids are Financially Cared For
Most Parents Haven’t Aligned Estate Plans to Guardians’ Needs
When both parents perished in a car accident, they left behind two devastated children – and a guardian completely unprepared for the financial burden of raising them. Though the parents had asked a close friend to serve as guardian, they hadn’t factored her situation into their estate plan or provisioned assets for the additional expenses of caring for their kids full-time.
The following is a dramatization and is not an actual event:
Despite the guardian’s best efforts, the financial stress led her to make difficult choices – pulling the kids from extracurriculars, selling the family home for something more affordable. With some estate planning forethought about guardianship contingencies, the parents could have prevented much hardship while ensuring a stable financial future for their children.
Customizing Your Estate Plan to Ease the Guardian’s Burden
When appointing a guardian for minor children, most parents simply name the person without considering their financial reality. By aligning elements of your estate plan specifically to ease the guardian’s financial duty in caring for your kids, you take pressures off of someone doing you an immense service.
Key Guardian-Focused Planning Actions
Review assets and expenses to quantify children’s needs
Evaluate guardian’s financial position carefully
Allocate assets or obtain insurance to fully fund children’s care
Consider trusts to prevent guardian misuse of inheritance
Factor in all aspects of children’s expenses – medical, education, housing, etc.
Treating guardianship considerations as an integral part of your overall estate planning process ensures your children are financially secure in their new family environment.
Honor Your Selected Guardian Through Thoughtful Planning
Losing parents is trauma enough for children without thrusting financial instability into the equation. Appointing a guardian you trust with your children’s care is an enormous responsibility – make sure your estate plan prevents added burdens so they can focus on helping your children heal.
Though discussions around dying and inheritance feel uncomfortable, taking action sets your guardian and children up for success. Hand-in-hand with your attorney, customize an estate plan catering to their needs so your kids feel supported through life’s hardest moments.
Next Steps
To learn more about integrating child guardianship contingencies into your estate planning process and customizing elements of your children’s inheritance, consult an attorney focusing on families, inheritance, and trusts. They can help ensure your kids and chosen guardian receive exactly the resources required – keeping your family’s best interests at the core.
Frequently Asked Questions
Can I direct inheritance funds only for my children’s needs?
By establishing a trust for your kids within your estate plan, you can outline specific appropriate uses for those funds while preventing misuse. These uses can include medical bills, education, housing, etc.
What if our named guardian passes before needing to care for our children?
Always name alternative or successor guardians in your documentation as backups. This appointment process would pass to your next selected person if the first guardian predeceases you.
My guardian selection seems underfunded. What options exist to provision care?
Beyond assets you already own that transfer through inheritance, additional tools like obtaining life insurance policies with payouts to your children can fully fund their financial needs under guardianship.
