In choosing guardians, the number one factor you should be considering is who is the best person to love and raise your child? While that person might be great with children, he or she might not be great with money, so it might make sense to place that responsibility with someone else that is better suited.
Similarly, it can be prudent to separate the responsibilities. This can create some checks and balances and ensure that guardians do not abuse their responsibility by having too much control and access over the assets as well. Furthermore, there may be many times when the trustee might be making financial decisions for the benefit of the child that also benefits the guardian, so there is a conflict of interest for the guardian.
For example, what if your guardian already has children and needs a larger vehicle or to add on to their home? What about family vacations or a new computer or sending your child to summer camp? While it can be argued that these transactions would be for the benefit of your child, the guardian would also be benefiting from them.
Thus, it may make sense to separate the responsibility of raising the children from the responsibility to manage their finances, or at the very least, consider naming a co-trustee to work alongside the guardian.
As parents, you have the power to limit the way in which funds are spent on your children, whether you have a separate guardian and trustee or not. For example, if you want to allot money for a guardian to move or add onto their home if needed, you can put a cap on the amount that the guardian can use for that purpose.
Haven’t made plans yet to legally appoint someone to care for your minor children if something happens to you?
Download our free guide, The Children's Safeguard Planning Guide, and then give us a call at 919-443-3035 or visit our website to schedule a free needs assessment call to discuss your planning goals.