Many people put off doing their wills because of the difficulty of deciding on a guardian for their minor children. But if choosing one is difficult, choosing two might actually make the process easier.
This is the situation no one wants to even think about: both parents dying unexpectedly and young children being raised by someone else. But it does happen. That’s why having a will and naming a guardian is so important for anyone who has children. Usually the problem is deciding between someone who is really good with your kids but who might not be so good or experienced with handling money and investments. But there is another way, as explained by NJ 101.5 in “Choosing guardians for your minor children.”
Yes, you can appoint one person as a guardian of the person—he or she will care for your child—and designate another person as a guardian of the estate—this person will care for your child’s assets. Typically, when minors are part of estate planning, the parents’ assets are put into trust until the minor reaches a specified age(s) when distributions are authorized or required to be made. As an illustration, the trust can dictate that a third of the balance be distributed when the beneficiary reaches age 25, a third when he or she reaches age 30, and the remainder when the beneficiary reaches age 35. At that point, the trust will be terminated.
The trustee will invest and distribute the funds at his or her discretion for the support, education, health, and welfare of the minor. If you go with two different people as named trustee and guardian, it gives them some oversight to ensure that neither one breaches his or her fiduciary duties.
So, you can select a person best suited to care for your child to be the guardian, and a person more suited to handle finances can be named as trustee.
In cases when the trustee and guardian are not the same person, think about naming people who’ll be able to work together. They’ll need to talk about the child’s needs and the assets available in the trust fund. If you choose two people, the guardian won’t be spending beyond the trust’s ability to reimburse.
In addition, speak with your attorney about the value of preparing a letter of instructions to your trustee and guardian. This provides you with an opportunity to explain how you wish funds to be distributed for your child, and can also be used to express any other wishes and details that you’d like them to know. This way they are both aware not just of how you want the funds to be used, but what your wishes are for your children.
Reference: NJ101.5 (October 24, 2016) “Choosing guardians for your minor children”