Picking a Guardian and a Trustee for Your Kids

by Kurt Hofgard,JD, CLU, ChFC

In my ten plus years of experience in the area of wills, trusts, probate, and guardianships, I have seen the heartache of the survivors many times when parents did not take the time to plan.  For example, in one case, the minor child of a deceased single mother was shuttled from household to household every few months when she became unmanageable, and when the court-appointed guardian (the “guardian of the person”) fought with the court-appointed conservator (the “guardian of the property”).  All this could have been avoided had the mother simply executed a valid will appointing guardian and trustee of her child.

Often, I also see estate plans from office supply stores, software, or the internet that set up guardians, and even trusts for minor children, but distribute the child’s assets to him or her outright at age 21.  Now, I ask all of you (and myself) . . . is it a good idea for someone to get hundreds of thousands, perhaps millions (with life insurance) all at once at age 21?  What a great party I would have had, but not sure if anything would have been left.

At our law firm, we find that the largest stumbling block for parents of young children in completing their wills is the choice of guardian and trustee.  Either no one (understandably!) lives up to the parents’ standards, or Mom and Dad cannot agree on the best choices and backups.

Our advice is this: make the decisions, even if one parent must compromise more.  The reason: in the case of both parents’ deaths or disabilities and no designation, more than one extended family member may think he or she is the best choice, and be willing to push to become guardian or conservator.  In such a case, the decision is left in the hands of a court.  This is a shame, considering that a written designation by a parent takes precedence, and could avoid this situation altogether.  Plus, you can always change your will later if you want to change your guardians and trustees. 

Picking a guardian in case of both natural parents’ death or disability to raise children is a tough choice for any parent to undertake. After all, a lot is at stake. Try to think of choosing a guardian for your children as if it were any other decision, like refinancing your mortgage, and approach it methodically.  Here are some questions that may help:

• What is the background of the person/s being considered (family, friend)?
• Are they financially secure?
• How old are they?
• Area they responsible enough?
• Where do they live?
• Do they already have children? Ages?
• If they don't have kids, are they capable of raising children?
• Do they have time to raise children?
• Are they healthy?
• What are their views on education? Other cultural/social/religious/belief system issues important to you and your spouse?
  

Picking a trustee can be equally daunting.  Sometimes the guardian and trustee can be the same person, if the guardian is financially responsible and you have no need for “a second pair of eyes.”  Otherwise, you may want to consider a different individual, or even an institutional trustee such as a trust company or bank trust department.  The trustee should know that the job is to provide for the child’s welfare (e.g., health, maintenance, education, support) and even make discretionary distributions to the child, but to know when to say “no” to a request for a distribution tothe child or even to the guardian that would be unwise.

A properly drafted will with a testamentary trust for minors addresses these and other issues and can give families, young and old, large and small, something priceless – peace of mind.

Kurt C. Hofgard, JD, CLU, ChFC  is an attorney with Hofgard & Associates, P.C. in Boulder.  He specializes in estate planning, small business planning, and insurance planning.   If you have questions about establishing a guardian or trustee, or any other matters relating to wills, estates, and trusts, you can reach Kurt at at (303) 449-0055 or khofgard@hofgard.com.