Who Will Raise Your Child?

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Elaine Bedel established Bedel Financial in 1989 in Indianapolis. Elaine Bedel established Bedel Financial in 1989 in Indianapolis.

There is nothing better than celebrating the birth of a new baby. If it is the first baby, there are many "first time" experiences to be enjoyed as well as some "first time" decisions to be made. Naming a guardian is one of those.

One of the most important decisions that parents make is choosing a guardian for their children in the event that both parents die unexpectedly. The realization of all the responsibilities of raising children and the fear that a terrible event may occur leaving their child an orphan, does cause young parents to pause.

Naming a guardian is not an easy decision. For this reason, parents should take time to talk through all of the various aspects of their choice. Once decided, the name or names need to be included in estate planning documents. In many cases, this is the reason married couples write their first will.

What to Consider

Here are a few factors to consider when making your selection:

  • Values. You need to determine the important values that you would like the chosen guardian to hold. These may include moral and social standards, recognition of similar educational values, as well as the practice of a particular religion.
  • Personality. While you want someone who will take the guardian responsibilities seriously, consider qualities such as maturity, humor, patience, and how he/she will relate to your children.
  • Parenting Skills and Lifestyle. Is it important for your chosen guardian to have experience as a parent? If he/she does not have children, would their lifestyle be compatible with suddenly becoming a parent?
  • Age and Location. Many times an obvious choice for guardian is the grandparents. While this may be an easy and comfortable decision, consider their age when your children go off to college. Will the older generation be able to meet the needs of active children? Another consideration is where the potential guardian lives.  Will the difference in geography create a hardship or other concerns?

Your Guardian Decision Can Be Changed

There are no "right and wrong" characteristics for a guardian. It is your choice based on who you believe will be the best "fit" for your children. You simply make the best decision given what you know today about your children and the potential guardians. Children are required to have legal guardians until the age of 18 years. As your children get older, you may identify needs that may cause you to believe that a different person may be a better choice. Likewise, the circumstances of a guardian may change, creating a need to name someone else. You can change the guardian as often as you desire by simply revising your will document.

In addition to naming a guardian, include in your will a second person to serve if your first choice is unable or unwilling for any reason. If your choice for guardian is a married couple, then you can name them as co-guardians. However, this may complicate issues in the future if the couple divorces.

Who Should be Responsible for Financial Issues?

If both parents are deceased, then it is very likely that the family assets will be available to meet the needs of the children. Ideally, parents will have completed the necessary financial planning to ensure their children can be well cared for. Life insurance is generally an important part of the planning for a young family.

When it comes to handling the money issues, it is advisable for someone other than the guardian to be named as the trustee. Dividing these responsibilities can be beneficial for two reasons. One, the trustee needs to have the knowledge and skill to handle decisions regarding investments as well as expenses. The second reason is to avoid any conflicts. If the guardian is making decisions regarding the spending of the children's funds, there could be a perceived or real concern on behalf of other family members as to the wisdom for some expenditures. Having two separate people, the trustee and guardian, agree on these financial issues may produce the best outcome for the children.

Communicate Your Wishes

Once you know your preference for the guardian and contingent guardian, it is appropriate to have a conversation with them.  First, you need to ask their permission. Second, you want them to understand your expectations. In addition to a conversation, it is advisable to write a letter of instruction. This document is not legally binding, but can provide additional clarity regarding your wishes and desires for your children. Make sure the guardian has a copy of the letter as well as any updated versions.

Summary

Choose a guardian that you believe is the best choice today; communicate with that person(s); and write a will that reflects your choice. If you do not and the circumstance arises, a court will be required to name a guardian for your minor children. Someone in your family may come forward to accept the responsibility and the court may approve them, but it may or may not be your preference. Only by naming a guardian in your estate documents will your wishes be known. Don't let something this important be decided by someone else.

Elaine E. Bedel, CFP, is CEO and president of Bedel Financial Consulting, Inc., a wealth management firm located in Indianapolis. She is a featured guest each Wednesday on the WTHR (NBC, Indianapolis) Channel 13 News at Noon, "Your Money" segment.  Elaine's book, "Advice You Never Asked For... But wished you had," is available on Amazon.com. For more information, visit www.BedelFinancial.com or email Elaine at ebedel@bedelfinancial.com.

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