Continuing our November Hoosier Estate Planning focus on celebrity estate planning mistakes, today we talk about providing guardianship provisions for minor children…
Anna Nicole Smith’s heirs argued over the care of her daughter. Failure to choose the correct guardians for minor children as part of an estate plan turns out to be one of the most common sources of tension in families, Kimberly Palmer, writing in U.S. News, points out.
At Geyer & Associates, we know that appointing guardians for minor children is a deeply personal decision. At the same time, while this task is one of the most important things to accomplish, it is also one of the most challenging.
Lewis Saret, writing in Forbes, lists several factors parents should consider when selecting a guardian:
- The age of the child. Older and more mature children should be afforded some input in the process, Saret says.
- The willingness of guardians to serve – and their ability to meet the physical and economic demands of raising an additional child.
- Religion/moral values/child-rearing philosophy of the proposed guardians – are these compatible with those of the parents?
- Guardians’ own family situations – are they single? Married? Do they have children of their own?
- Economic implications. Guardians are not legally obligated to support wards out of their own pockets. Would the guardians need to move into a larger residence? Employ housekeepers or childcare providers?
The guardianship provisions in your will document your choice for the guardian(s) and successor guardians of your children, and that choice has precedence under Indiana law.. However, even after those choices are made, Indiana requires court approval of the guardianship to ensure the best interests of the child are being met.
Another mistake is leaving assets to children as soon as they achieve majority. When Robin Williams died in 2014, leaving an estate valued at $50 million, his trust provided for the children to receive significant assets beginning when each child turned age 21. It’s important to consider the problems caused when young adults receive big chunks of money. Not continuing the trust for longer also fails to protect the assets from potential creditors of the children, or could subject the inheritance to division with an ex-spouse if the child later divorces. Actor James Gandolfini made the same mistake, providing for his daughter to receive 20% of his estate (estimated at $70-80 million) at age 21!
As estate planning attorneys, we know careful planning is needed to protect the people most important to you, including your children. Choosing the right guardians for minor children, and determining the best ways to protect them from financial pitfalls, is one of the most important, challenging, and rewarding aspects of estate planning.
– by Corinna A. Smith of Rebecca W. Geyer & Associates
