Designating Guardians and Trustees for your Minor Children

As parents, one of the most essential parts of your estate plan is ensuring your minor children are appropriately cared for following your death. Having a clear plan provides peace of mind for you and your loved ones and ensures your wishes are memorialized and your children are cared for accordingly.

Guardians and trustees

If you have minor children, you should consider guardianship appointments and trustee appointments as part of your estate planning.  The duties and responsibilities of the trustee and guardian are different, but, together, they share in caring for and ensuring your children are provided for.   

Guardian: A guardian is legally responsible for an individual who is unable to manage his or her own affairs, such as a child who has not attained the age of majority (in New York, eighteen (18) years of age). The guardian is responsible for providing a stable home environment for your minor children, and will be responsible for making day-to-day decisions affecting your minor children, including your child's schooling and healthcare needs. An appointed guardian is not responsible for your child's finances and has no authority to manage or control your child's assets.

Trustee: A trustee manages the assets set aside for your child, such as bank accounts, investments, and property held in trust for the benefit of your child.  The trustee is a fiduciary, requiring the trustee act in your child's best interest, ensuring the funds are used appropriately for things such as education, healthcare, visiting family, general well-being, or anything else you designate the money for.

Although these appointments carry different responsibilities, some parents choose to assign the same individual or individuals to serve in both roles. This may be appropriate where the person designated has both the skills required to care for the minor child's person and the child's finances.  This, however, isn't required – and, in many instances, parents intentionally designate separate individuals to serve as guardian and trustee.  Some reasons for this is to avoid potential conflicts, build in additional oversight and accountability, and to ensure the appropriate individuals are selected for the roles.

Key considerations for assigning guardians and trustees

When selecting a guardian for your minor children, the following are some factors to consider:

• Availability: Is the person you have in mind available to commit to taking care of your child(ren) full time?  Are they capable of providing a stable environment for your child?

• Financial Stability: Is this person financially stable enough to care for your child?  While the guardian is not responsible for managing your child's assets, his or her own financial situation may create stresses that may negatively impact the home environment for your child.

• Emotional Stability: Is this person emotionally stable?  Can they handle the challenges that come with parenting?

• Understanding Your Wishes: Does this person understand your values and philosophies as it relates to raising your children?  It's important that whoever you choose to be your child's guardian understands and respects your values and parenting style.

• Compatibility with Your Children: Does this person know your children? Your child's guardian should have a good relationship with your child and be someone they feel comfortable with.

When selecting a trustee for the trust that will hold the assets for the benefit of your minor children, the following are some factors to consider:

• Financial Management Skills: Is this person or entity (i.e. corporate fiduciary) sufficiently skilled in managing assets?  Your child's trustee should be able to manage funds, invest reasonably, and make sound financial decisions.

• Organizational Skills: Is this person or entity organized and will they keep good records and accountings of trust transactions?  A trustee should be detail-oriented and able to keep accurate records of transactions and distributions.

• Legal Knowledge: Does this person or entity understand their duties and responsibilities as it relates to the trust?  Do they understand when and how to make distributions to or for the benefit of your children, and the parameters?  Whoever you choose to be your child's trustee should have a basic understanding of trust laws and fiduciary duties. Don't worry – an attorney will be able to guide them along the way.

If you decide to designate different individuals to serve as guardian and trustee, you should also consider how well the two will get along, communicate, and work together as a team for your minor child's best interests.

Trusts

In addition to determining who should serve as trustee, you should also consider how you want the trust to be administered for the benefit of your children.  Trusts are flexible legal devices that allow you to control how and when the trust assets should be apportioned to your children.  Many parents, at minimum, wish for distributions to be made to, or for the benefit of their child, for health, education, maintenance, and support purposes.  Some parents include additional parameters, like annual forced distributions or trust termination provisions. 

How an attorney can assist you in this process

Once you have considered the above factors, you should meet with an attorney to discuss designating a trustee and guardian for your minor children under your estate planning documents.  An attorney will work with you to discuss the appropriate individual(s) to designate in each role and possible contingencies (i.e. if the person you select as guardian predeceases you).  An attorney will also work with you to discuss your philosophies related to trust planning for your children and your intentions related to their inheritances.  An attorney will also draft the appropriate legal documents to memorialize your wishes.

Engaging an attorney is crucial in navigating the complexities of selecting guardians and trustees. At Bousquet Holstein, our attorneys prioritize understanding your unique family dynamics, assets, and the legal frameworks best suited for your situation.

When it comes to drafting legal documents, our attorneys ensure they are precise and comprehensive, covering specific instructions for both the guardian and trustee, including how funds can be utilized. Your attorney will clarify the legal implications of your decisions and guide you through the entire process, alleviating some of the stress associated with these significant choices.

Our experienced attorneys can provide you with insight and will be able to advise you on factors to consider when selecting your child's guardian and trustee, both the ones mentioned above and additional considerations that best meet your needs.

Conclusion

Choosing a guardian and trustee for your minor children is a significant decision that requires careful consideration and appropriate planning. Our attorneys at Bousquet Holstein are dedicated to guiding you through each step, ensuring that your wishes are clearly memorialized and legally binding.  We are here to provide support and clarity, to help you create a plan that protects your child's future.

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