If something happens to you while your children are young, who will care for them?
It takes time and energy to get your important records in order. Some of the most important—yet most difficult—steps are those regarding care for your minor children. The paperwork isn’t difficult, but the decisions may be hard. It’s hard to imagine your own death, especially while your children are young. It’s also hard to select a guardian; you can think of pros and cons to any choice. Then the issues are further compounded as you and your spouse come to agreement.
In addition, if you drive your children to school and lessons and medical appointments, you may have information about their care that others don’t have—unless you leave that information where it can be found when and if it’s needed.
Motivate yourself with the anticipation of peace of mind. Knowing that your wishes are in order, just in case something happens to you, can put to rest that low-rumbling, persistent concern.
First, the legal decisions. You should consider naming personal guardians and property managers for your children. A personal guardian will provide a home and oversee personal care for your child—food, medical care, education. A property manager will handle the child’s finances—with integrity and in the child’s best interests.
You can name the same or different people to assume the two roles. That is, you could name your sister, Mary, as both personal guardian, as well as property manager. Or, you could name Mary as personal guardian and your brother, Bob, as property manager.
Also, you can name the same or different people to care for each of your children. For example, if you’ve two children, they may be attached and comfortable with two different families. You might have strong reasons to name a different personal guardian for each child.
Naming Personal Guardians
You may want to avoid the whole issue, assuming that your spouse will take over if something happens to you. (It is rare that you’d die young and simultaneously.) The courts would, usually, assume that the surviving parent would continue to serve as guardian.
To ensure your plans are carried out, however, you should specify your choice of personal guardian (or guardians) in your will (the only legal means for naming a personal guardian). If you are married, you and your spouse should name the same personal guardian in each of your wills. Before you finalize your wills, review your wishes with the potential guardian to ensure he or she feels willing and able.
Naming Property Managers
There are several documents in which you can name property managers, including your will, your living trust, a life insurance policy, or your retirement account. As you make or update these documents, be certain your wishes are current and consistent.
If you are married, you and your spouse should agree on the choice of property managers and ensure your individual documents are consistent.
Avoid leaving assets directly to your minor children. If you do, the courts will appoint a property manager—again, usually the surviving spouse—but will also require periodic reporting of how the assets are being managed. Further, the court may impose limits (according to the laws of your state) on how funds are spent. You might not want to place this burden on your spouse or other trusted adult.
Here are some tips for avoiding this situation:
• You probably want to specify your spouse as property manager, with a second trusted adult as alternate manager.
• In your will, living trust, life insurance policy, or retirement account, identify the property, specify the minor beneficiaries, and name the property manager who will serve under your state’s Uniform Transfers to Minors Act (currently available in all states but South Carolina and Vermont).
• In your will or living trust, you can set out trusts for your children (either a child’s trust for each or a pot trust). You can specify property, minor beneficiaries, and property manager, and (unlike UTMA, just above) you can also specify the age of full asset distribution to the children.
• If you want to leave life insurance proceeds to your children, talk with your agent about naming minor beneficiaries and a property manager. You can do this either through UTMA (directly on the policy) or through trusts for your children (naming your will or living trust as beneficiary).
For more information on the law and your options, turn to Nolo’s Plan Your Estate by Denis Clifford (www.nolo.com).
Documenting Daily Care
If you’re suddenly incapacitated or die unexpectedly, others will step in to help with your young children. For each of your children, consider documenting his or her school, day care or periodic sitters, doctor, dentist, music teacher, sports coach, and so on. For each, provide contact information, type of care provided, and schedule—a valuable roadmap for those who may be helping.
Melanie Cullen is the author of Get It Together: Organize Your Records So Your Family Won’t Have To (Nolo), a workbook/CD-ROM for preparing and organizing your important records—for yourself and for your loved ones. She is a management consultant with TerraSys Consulting, Inc. and serves on the Projects@Work editorial board. She holds an MBA from the Graduate School of Business at Stanford University.
Image Source: Flickr Creative Commons/nyki m