When planning for the future, estate planning often focuses on finances, wills, and trusts. However, one of the most critical decisions parents can make is choosing guardianship for their children. Naming a guardian ensures that, in the event of your passing, your children are raised by someone you trust and who shares your values. But how do you make this decision, and how can you ensure your chosen guardian has the resources and guidance they need?
How to Choose the Right Guardian
Selecting a guardian is a deeply personal choice that should consider multiple factors:
Shared Values and Parenting Style – Your chosen guardian should align with your parenting philosophy, discipline style, and values regarding education, religion, and lifestyle.
Emotional and Physical Stability – Raising children requires significant time, energy, and patience. Consider whether the guardian has the stability and capacity to take on this role.
Financial Situation – While your estate can provide financial resources, the guardian’s personal finances should also be stable enough that they can provide a stable environment and support themselves while attending to your child’s needs in the interim.
Willingness to Serve – It’s critical to have a conversation with your potential guardian to ensure they are willing to take on this responsibility.
Ensuring Financial Support for the Guardian
A guardian should not bear the financial burden of raising your children alone. You can plan for their financial support in several ways:
Life Insurance – A life insurance policy can provide financial security for your child’s future needs, from daily living expenses to education.
Trust Funds – Establishing a trust allows you to set aside funds specifically for your children, managed by a trustee who distributes the money according to your instructions. This can be particularly helpful for children with special needs. Having a supplemental needs trust in place can allow for your child to qualify for government assistance but still receive supplemental financial support from any inherited assets via trust.
Designated Accounts and Inheritance – Clearly outlining financial provisions in your estate plan ensures that your children’s needs are met without financial strain on the guardian.
Is no magical person coming to mind that would be both responsible with raising your child and managing their inheritance? Fortunately, estate planning allows for a separation of duties, ensuring that the person raising your child does not necessarily have to be the one managing the finances. You may choose to name one individual as the physical guardian who provides daily care and another as the financial conservator who oversees the assets left for your child’s benefit.
This division of roles can be particularly helpful if your ideal guardian is not financially savvy or if you want someone with experience in financial management to oversee the funds. A financial conservator, often a trusted family member, a close friend, or even a professional trustee, can ensure that funds from life insurance, trusts, or inheritance are used wisely for your child’s upbringing, education, and well-being. Meanwhile, the guardian can focus on providing love, stability, and guidance without the added burden of managing significant financial assets.
If a single person is well-equipped to handle both roles, that can work as well. However, carefully considering whether one individual is the best fit for both aspects of the job is crucial. By structuring your estate plan thoughtfully, you can ensure that your child’s needs—both emotional and financial—are met in the most effective way possible.
Communicating Parenting Goals and Decisions
Even if your chosen guardian shares your values, they may not know the finer details of your parenting approach. It would be welcomed by a guardian to receive what we can call a “parenting guide.” A letter outlining your parenting style, routines, lifestyle choices, educational priorities, medical preferences, and any other essential guidance. Don’t know where to start? Write down your basic thoughts and ask AI to help develop. You can adjust from there. In no time you’ll have something great to include with your estate plans.
If your guardian is a close family member or friend, discussing your parenting choices over time can help them internalize your approach. We also evolve as parents and our children’s needs change. You may not see the value of private school during the toddler years and have a change of heart once receiving a dyslexia diagnosis. Being open and honest about relevant family affairs with those you’ve chosen to be guardian can be extremely valuable should they ultimately need to make decisions.
Talking to Chosen Guardians and Storing Estate Plans
It’s crucial to communicate with your chosen guardian ahead of time. A difficult situation could become even more stressful if they are caught off guard or unprepared. Here’s how to ensure they are ready:
Have an Open Conversation – Talk with your chosen guardian about your decision, their willingness to serve, and what the role entails.
Provide Access to Estate Plans – Keep your estate documents, including your will, trust documents, and financial plans, in a secure but accessible location. Let your guardian and key family members know where to find them.
Update Plans as Needed – Circumstances change, and your chosen guardian’s situation may evolve. Regularly reviewing your estate plan ensures that your decisions remain in your family’s best interest. It’s not uncommon to feel like your estate plans are outdated in just 3-5 years time. By all means make updates as needed.
Final Thoughts
Choosing guardianship for your children is one of the most important decisions in estate planning. By selecting the right person, providing financial resources, communicating your parenting philosophy, and ensuring easy access to estate plans, you can create a stable and supportive future for your children. If you haven’t yet named a guardian or need to update your estate plan, now is the time to take action.
