So You Have Been Asked to Be a Guardian

Last year, my brother and his wife asked me and my wife Emily that if something happened to them, could we be guardians of their minor children. Our children are grown, out of the house and self-supporting. My brother and his wife had set up an estate plan and in the event of their demise, there would be funds available to care for their kids. We thought about it. It would be a responsibility, but we felt that we could handle it, so we accepted.

You may also have been asked to be the guardian of the children of one of your siblings or a close family friend in the event of that person’s incapacity or death. You are flattered that someone would trust his or her children to you. Your first inclination in such instance is to accept. However, there are three key items that you may want to consider before you take on this important role: family compatibility, proper appointment and finances.

Family Compatibility

If the kids are going to move in with you, how well do you and your own kids get along with them? Are family values similar? Since they would be part of your family, you probably want to treat them the same as your own kids. You have done a good job raising your own kids. That’s likely why you were chosen.

Are your religious views and the other parents’ religious views compatible? If you rarely go to church but the other parents take their children to church every Sunday, do the other parents intend you to change your weekend schedule to accommodate their kids. Or if you are Christian and the other parents are Buddhists, what is expected of you?

You may expect your kids to do their own laundry and have assigned family chores to them, such as household cleaning or mowing the lawn. If the new additions to the family are not also assigned similar chores to do, you may have difficulty with your own kids who may feel that the new kids are not doing their fair share. Or if the new additions to the family have never had chores because their parents doted on them, you may have difficulty with them; not only have they lost their parents, they now have to try to adjust to a lifestyle that that is foreign to them.

With the new additions to the family, it may result in less time being spent with your own children. Is that something with which you could live? Is there enough of you to go around? Or, if you are an empty-nester with all your kids grown up, do you really want to jump back into that role of parenting young children again? Remember how much fun you had parenting your daughter from middle school through high school?

Proper Appointment

If you are going to be appointed as a guardian, has the appointment has been made properly so that if the time comes, there are not going long court proceedings or fighting over who is going to take care of the kids?

In Michigan, you can avoid the time consuming court appointed guardianship hearing process by having the parents of minor children sign a proper appointment of guardian. All you would need to do in the event of the parents’ death or incapacity would be to take the appointment document down to the probate court, sign an acceptance of guardianship, and the court would then issue letters of guardianship authorizing you to take care of the kids. No muss, no fuss and no court hearings.

In the appointment document, there should be a contingent or back-up guardian. If things do not work out with you as guardian or you are otherwise unable to act as guardian, you could similarly avoid a long protracted court guardianship process to appoint your successor as guardian.

The appointment should be reviewed periodically, preferably annually. If not reviewed regularly, there could be unintended consequences. You may have been agreeable when you were only going to care for two extra kids, but then the parents had four more. Or you had no problem caring for two others when you only had one of your own; now you have three of your own. You may no longer be able to care for or want the added responsibility of additional household members.

Finances

Kids are expensive. You should know ahead of time whether you would be expected to shoulder all of the costs of raising the kids or if there will be additional funds available left by the parents for the care of their children. When there are other funds available, there are three important things you may want to know before you accept the appointment: 1) Who is in charge of the finances; 2) How the funds are going to be managed; and 3) What the funds can be used for.

Are you expected to manage the children’s funds or is someone else? You may not want to keep track of another set of financial records for the investments and bills. Keeping track of the kids may be enough additional responsibility you may want to have. If someone else is going to be managing the funds, is it someone with whom you can work? You do not want it to be a major chore every time you needed some funds for the new family members.

Are the funds going to be set up in a trust or is there going to be a court appointed conservator to manage the children’s funds? With a trust, the trustee typically has the discretion and the authority to spend the trust funds as he or she sees fit. On the other hand, with a conservatorship, the conservator must report to the court on a regular basis and may have to make a request to the court to approve payment of certain bills or bills in excess of certain amounts.

I generally recommend that parents of minor children set up trusts for their minor children in order to avoid the hassles of the court appointed conservatorship process. Not only is a trust more private and more flexible than the court appointed conservatorship process, the parents decide when the kids are in control of their funds, such as age 25 or 30 or even later. With a court appointed conservatorship, the kids are entitled to their entire inheritance at age 18 when they are legal adults and miraculously gain all the wisdom and insight of adulthood, including the ability to manage large sums of money. They can use their inheritance to go to college, the University of Corvette.

Once the funds are available, for what can they be used? If your house is too small for the additional family members, can you use the kids’ funds for their housing, such as to either put an addition on your home or to buy a larger home with more bedrooms? Basic needs, such a food and clothing, are one thing, but what about college funds? The more flexible the instructions for the funds’ usage are, the more likely the children’s needs will be met.

Statistics show that in the United States, 5% of children under the age of 18 do not live with either biological parent. So chances are one in 20 that a situation may arise in which a guardian will need to be appointed for a child. Whether you are accepting an appointment or doing the appointing, it is not something you should take lightly.

By Matthew M. Wallace, CPA, JD

Published edited March 12, 2017 in The Times Herald newspaper Port Huron, Michigan as: So, you have been asked to be a guardian

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