Tuesday, January 23, 2007

Somebody Take Care of My Kids...Please!

A common inquiry I receive is "who should be the guardian for my children?" and "who should be the trustee for my children's funds?" There is not a right or wrong answer to these questions. Typically, for a guardian, you'll want to name a family member or close friend who would be willing and able to assume the responsibilities. Make sure that you discuss this issue with them and that they are comfortable with the possibility.

While that certain person you select as a guardian might be a great "substitute parent" (maybe even better than you) they may not be able to hold onto a nickel without blowing it. If so, then they might not be the best person to handle the money for your kids. It is not uncommon to have one person as the guardian and another as the trustee. While this may add an additional level of complexity to the situation, it also provides for a "check and balance" system. The trustee can make sure that the funds are properly being utilized for the kids and the guardian will make sure that the kids' needs are taken care of. A trustee, if not a bank or trust company, should be someone who is comfortable with making financial decisions or associating with advisors for making decisions, handle investments and address tax returns. They should also be organized and capable of making tough decisions for the best interests of the kids.

Discussions with your spouse and family are important. Together, with the advice of legal counsel, you can select a structure that will be the best solution for your children in an unfortunate situation. . . your death.

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