Who will raise your minor children if the unthinkable happens and your children become orphaned or you cannot care for them?
Designating a guardian for your children is one of the most important decisions you can make. However, it is also one of the most difficult decisions, and many parents put off making the decision. In many states, if you die while you children are minors, a will may be your only means of designating a legal guardian for them.
If you do not designate a guardian, the courts may, and they may not choose the person you would prefer. Typically, the court chooses a close relative. However, if there are no close relatives, your relatives are older, or none agree to be the guardian, your children may be put in foster care.
It is very important to get this designation in place. Keep in mind that:
- You do not have to choose a relative as the guardian, and
- You can always change the guardian designation at a later date if your situation changes.
What if the best person to raise my children is not good at handling finances?
You can chose one person as legal guardian of your children and another to manage your children’s trust or bequest. It is important that both the guardian and the financial manager understand your wishes and priorities and that they can work together. Both should have similar ideas of what is needed for the proper raising of your children and be able to work together on making spending decisions.
How can I provide funds so as not to put a financial strain on the guardian?
If your estate is not large enough to provide a sizable nest egg that can be used by the guardian to raise your children, consider buying life insurance to provide the needed funds. A life insurance policy can designate your children, the guardian, or a trust as the beneficiary. Be sure to speak with a trust attorney and/or a financial planner to find a strategy that works best for your situation.