Archive for Guardianship
YOUR EIGHTEEN YEAR OLD SON’S PORSCHE
This newsletter continues our series on the six common mistakes parents make when naming guardians for their children. MISTAKE #5. YOU MAY NOT HAVE PROVIDED FOR SOMEONE TO TAKE CARE OF THE MONEY YOU ARE LEAVING BEHIND.
So, having learned how to avoid the first four mistakes, you have named short term and long term guardians for your children, specified what would happen if the couple you have named to act as guardians are no longer together, prepared a confidential document excluding anyone who might challenge your decision, and have provided necessary financial resources through life insurance or other means for the guardians to properly take care of your children. However, in so doing you named your minor children as the beneficiaries of your life insurance policy. Uh Oh! Big Mistake!
Minor children are not legally permitted to receive life insurance proceeds. Naming them as your beneficiary guarantees that court involvement will be necessary in order for someone to be appointed to safeguard this money. The court will supervise the money only until each individual child reaches the age of eighteen (18), at which time the child receives his share of the money outright, to be used as an eighteen (18) year old sees fit, including buying an expensive automobile.
What you must do is not only name appropriate financial guardians for the children, but you should name either those guardians or a trust as the beneficiary on the life insurance policies themselves. For example, if you have named your spouse as the primary beneficiary on your life insurance policy and your children as the contingent beneficiaries, the contingent beneficiaries likely would need to be changed to read, for example: “Atticus Finch as guardian for Billy Sample” or as the “trustee of the Billy Sample Trust”. By properly naming a guardian as the beneficiary of the life insurance proceeds, you will avoid the time and expense of a court proceeding to establish a guardianship. You also will be able to make decisions to protect against your child receiving a substantial sum of money outright at age eighteen (18), by providing specific instructions to the financial guardians.
Check with your estate planning attorney or life insurance agent to make sure the naming of your life insurance beneficiaries is done correctly. Honestly, what 18 year old doesn’t want a Porsche!
YOU HAVE NAMED EBENEZER SCROOGE AS YOUR CHILDREN’S GUARDIAN.
This newsletter continues our series on the six common mistakes parents make when naming guardians for their children. MISTAKE #4. YOU MAY HAVE CONSIDERED FINANCIAL RESOURCES OF POTENTIAL GUARDIANS WHEN DECIDING WHO SHOULD RAISE YOUR CHILDREN.
In thinking about who to name as guardian, you wanted to make sure that your children would not go wanting and that the person you named could afford to feed, clothe and educate them. So you decided to name your rich Uncle, Ebenezer, to serve as their guardian. Old Uncle Ebenezer is very wealthy, good with money and can easily afford to raise your children. Unfortunately, although Ebenezer has money, there is much else that he lacks. In fact, naming him as guardian might actually be detrimental to your children.
Your children’s guardians will be the people in charge of their emotional, spiritual, and physical well-being, not necessarily just their money. It is your responsibility to leave enough money behind to take care of your children, either through savings or an adequate amount of life insurance. You even can choose to name one set of guardians to take care of the children personally and another set of guardians to take care of your children financially, if the best choice of guardians is not “good with money” people.
It is far more important that you choose a guardian that matches your list of parenting values rather than one who is financially independent. Providing your children with love and good values should be a prominent consideration. Ebenezer’s “Bah Humbug” ! attitude likely would not be your first choice in desirable character traits for your child’s guardian.
Another important point is that not only parents, but also grandparents, can ask about these important questions. Don’t let “Bah Humbug” ruin the spirit of your children or grandchildren! Any grandparents reading this issue should feel free to pass this newsletter on to their children.
We previously have commented on the estate planning of Mrs. Astor, which led to her son facing several criminal charges. (See our posts of 8/4/09 and 8/6/09.) He now has been found guilty of most of those charges. http://www.nytimes.com/2009/10/09/nyregion/09astor.html?_r=1&hp
Naming Guardians For Your Children
Just read an interesting article at http://www.miamiherald.com/living/family/story/1175433.html. It reminded me not only how important it is to name a guardian for your minor children should something happen to you, but also how difficult making this decision can be. Compounding this difficulty is the fact that many parents make at least one of six common mistakes when naming a guardian. Obtaining good legal advice and counselling throughout the process can help eliminate mistakes and lessen the stress of the decision. At The Cramer Law Center we specifically focus on the needs of parents who face decisions as to how to best plan for the future of their minor children.
