When you are a parent, a huge part of estate planning tends to focus on the needs of your minor children. Most parents find it very difficult to contemplate the idea that their children might grow up without them, so the decision about who to name as their children’s guardian can be hard.
However, you also have to decide who is going to control the purse strings on the assets you leave in trust for your children’s futures – and that may be even harder.
Shouldn’t the same person serve both roles?
There’s no rule that says the guardian of your child and the trustee who is in charge of their financial assets can’t be the same person. On the surface, it may even seem to make sense to do it that way, because the guardian would have first-hand knowledge about your children’s needs.
However, the attributes that make someone a good choice for a guardian aren’t necessarily the same attributes that make someone a good trustee. A guardian should share your values, have emotional intelligence, and be the supportive, substitute-parent your children will need. A trustee, on the other hand, should have strong financial skills and experience with saving and investing for the future.
Also, there is always a chance that your guardian may run into financial trouble down the line. If the funds in the trust are accessible to them, they may misuse the money to alleviate their own money troubles (sometimes with good intentions to pay the trust back, sometimes not). – That temptation could put your children’s financial futures in jeopardy.
There are a lot of things to consider when you’re making your estate plans. It is often easier to discuss your concerns with someone who can provide an unbiased, neutral perspective. Call us to go over these very important decisions.