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Minors and Estate Planning

10/29/2020 - Financial Planners, Investing for Life, Starting a Family

Smiling young couple with daughter get assistance from female representative.

Reportedly, only one-third of parents with a minor child have a will in place. One obstacle seems to be the naming of a guardian for the child in the event that a parent dies while the child is a minor.


One should start with the largest possible list of potential guardians. Relatives, friends, business partners, parents of the friends of the children, all are worthy of consideration. Then the list can be narrowed down by considering:

  • Age of the child or children. Infants and toddlers require substantial time and attention, and many people would find it difficult to accept such responsibility. Older children present a different set of issues, and they also may have established friendships and school identities.
  • Geography. If a child is well established in the community, with friends and successes in school, it would be best to avoid disrupting that following the trauma of losing a parent. On the other hand, a child who is not happy, perhaps because of bullying or other issues, might welcome a clean slate.
  • Religion. Children need spiritual guidance, so finding a guardian of the same beliefs as the parents is often an important consideration. In the absence of that, a “spiritual guardian” might be appointed to supervise church attendance and religious instruction.
  • Grandparents. Age and health permitting, grandparents may be a very good choice as guardians. Grandparents may be retired, and so have plenty of time to dedicate to the job. They already may be familiar enough to be a ready source of emotional support for the child. Grandparents may be able to relocate if they are not bound by employment requirements. On the other hand, courts may raise questions if a grandparent is very old, even if one is currently in good health.
  • Adult children. A child who has reached adulthood may be a reasonable choice for guardianship over younger siblings, provided that he or she is mature enough and able to command the respect of the young ones. Family members often are favored by the courts for this role. On the other hand, there are opportunity costs imposed on the guardian being thrust into a position of such responsibility, which may interfere with getting established in a career or completing one’s education.
  • Married couples as co-guardians. Co-guardianships are expressly anticipated in some state statutes, but important concerns have been raised about this approach. There is the chance that the couple will be divorced when the time comes to name a guardian, so which one will it be? There is the chance that the couple will divorce after becoming guardians, creating additional custody issues. Still, if the couple being considered for guardianship have children of their own, it is reasonable to name both as guardians so that the wards have the same status as the natural children.
  • Willingness to serve. The prospective guardian should be asked about willingness and ability to serve in that role. The nominee should be given time to consult with his or her family before making a decision to accept the responsibility. Clients should be encouraged to keep the nominee active in the child’s life, through visits, phone calls, and the like.

Divorced Parents

After a divorce, the custodial parent may be concerned that naming a guardian may prove ineffective. The concern is valid, because the noncustodial parent will have the first right to take custody of the children at the death of the custodial parent. There are two ways to resolve this dilemma.

First, the noncustodial parent may consent to appointment of a guardian, abandoning parental claims. Alternatively, one may try to prove that the surviving parent is unfit. This may be achieved with a sworn affidavit reciting the reasons for the unfitness.

Using a Trust

After the guardianship issue has been settled, a plan is needed to manage the inheritance for the child or children. A “sprinkling trust” (sometimes called a “minor’s trust,” a “children’s trust,” or a “pot trust) is often used rather than individual trusts for each child. A sprinkling trust replicates the manner in which family finances are managed, providing for each child according to his or her needs. When all the children have reached adulthood, the trust may divide into separate shares for each child.

In addition to providing distributions for the children’s health, education, and support, the trust could have an explicit directive that the trustee is to provide funds to allow the children to visit relatives on a regular basis. Also, the trust may allow for compensation for the guardian, so that the guardian is no worse off for having accepted the role.

© 2020 M.A. Co. All rights reserved.
Any developments occurring after February 1, 2020, are not reflected in this article.

Content is for informational purposes only and is not intended to provide legal or financial advice. The views and opinions expressed do not necessarily represent the views and opinions of WesBanco.

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