Debbie was a woman who came to me when she was already in the last phase of her journey with breast cancer. She had waited during more than a year of treatment to begin her estate plan and she knew she needed to act fast. She had a 12-year old daughter and an ex-husband who was ill-prepared to manage Debbie’s finances after her death.
Debbie knew that her ex-husband was a great dad and that her daughter would be well cared for living with him after Debbie’s death. But she was not about to leave an estate worth over $1 million dollars in this man’s hands. She wanted to make sure her estate would be managed properly for her daughter Sabrina’s benefit until such time as Sabrina would become mature enough to handle a substantial inheritance.
Debbie came to me wanting to make a trust for the benefit of her daughter and also to nominate a Guardian to take care of her daughter. Debbie understood that since Sabrina has another parent, there was no way that she could name anyone else to take care of her daughter’s physical well being.
A Guardianship is a court-supervised arrangement whereby someone other than a biological or adoptive parent has the legal authority to raise a child and manage a child’s finances until the child reaches the age of 18. Fortunately, a Guardianship has two prongs: there’s the Guardian of the Person, who raises the child and the Guardian of the Estate, who manages a child’s finances.
In Debbie’s case, we knew that her ex-husband would remain the surviving parent, but we needed to nominate someone other than the ex-husband to serve as Guardian of the Estate, to manage the substantial amount of wealth Debbie was going to leave for Sabrina. Debbie had a lot of friends, but she did not want to burden them with the task of managing an estate until Sabrina turned 25 (Debbie’s choice for an age of distribution). And Debbie wanted the funds to be professionally managed. I suggested she interview some of the local professional fiduciaries and she found one in particular whom she really liked.
In Debbie’s Will she nominated the professional fiduciary, Mary, to be Sabrina’s Guardian of the Estate, to manage any funds, such as retirement accounts, that would not go into Debbie’s trust. She also nominated Mary to serve as trustee of the trust, which holds Debbie’s house and other assets for Sabrina’s benefit, until Sabrina reaches the age of 25.
This was an example where we were able to honor the surviving parent’s role as the person who raises Sabrina while at the same time making sure that Sabrina’s inheritance is managed by a professional fiduciary who serves as both Trustee and Guardian of the Estate.
If you have a minor child, you need to make sure you have a Will that nominates Guardians in the event that a child loses both of his or her parents before reaching adulthood. Even in families with two married parents, it is essential to have Guardian nominations in a Will, for the unlikely event that both parents die before a child turns 18.
