How To Choose Appropriate Guardians for Minor Children

The previous chapter shed light on the importance of estate planning, the process of drafting a will and assigning beneficiaries. In this chapter, we will focus on making appropriate provisions for your minor children in an estate plan in case there is an untoward situation, and you and your spouse are no longer around to take care of them.  

Choosing a guardian is the best way to ensure that your children and their finances are taken care of until they become adults. Now, a guardian can be of two types: 

• Guardian of the person or personal guardian – They will offer your kids a safe place to live, education, food, clothing, and address their overall wellbeing  
• Guardian of the estate or financial guardian – They will handle your children’s inheritance and use the same to meet their expenses until they turn 18

While the same individual can act as both the guardian of the person and the estate, you are also free to choose two different individuals. If you have multiple kids, you can choose multiple guardians. 

Choosing the right guardian for a minor child during estate planning is recommended since it:

• Gives you peace of mind since you know your kids won’t be assigned a random guardian who might not be the best fit 
• Prevents friction and disputes among family members when it comes to taking care of your children in your absence 

Now, let’s delve into the factors to keep in mind while selecting a guardian. Some of the factors might seem more relevant to a personal guardian or a financial one. However, in a broad sense, all of them matter.   

How to Choose the Ideal Guardian? 

Outlined below are the key aspects to consider while choosing a guardian. 

• Age and health – Pick someone who is young and fit enough to carry out their responsibilities for a long time, even after your child becomes an adult, as they will need ample guidance to face the world on their own. The guardian shouldn’t have health problems that might impact their longevity or physical and mental abilities.   
• Experience with children – Find out if the potential guardian has any experience with kids, even if they don’t have any of their own. After all, they may need to nurture and guide a child throughout the formative years and take care of their overall well-being. 
• Skills – Someone who is good at numbers and money management can be a good choice as a guardian of the estate. However, they might not be able to address the emotional needs of your child or monitor their cognitive development (especially in small kids). In such a scenario, you will need someone else as a guardian of the person. 
• Financial soundness – Make sure the guardian is financially stable and has a decent employment history. They should be adept at handling financial obligations, saving, and managing expenses. Someone who has a stressful job travels frequently, or deals with late hours might not be suitable for the care of minor children who will experience a major change or loss.  
• Location – Check if the person you have in mind for guardianship moves around a lot for work or lifestyle needs. Decide if that will be ideal for your children since frequent changes in surroundings can disrupt their sense of stability or comfort.  
• Values – Pick a guardian who has a parenting style similar to yours, whether it comes to disciplining a child or fuelling their personality development. You might also want someone with similar religious or cultural beliefs. Whether you are selecting a guardian of the person or estate, consider someone who shares your vision or goals about child-rearing.  
• Family environment – A guardian should ideally be someone with a stable, happy, and healthy family environment. If they are married, their relationship with their spouse should be a good one. If they are a parent, observe how they interact with their kids and how the kids behave at home and outside.  
• Character – When choosing a guardian, steer clear of people with criminal records or a history of alcohol or drug abuse. Their moral character should be spotless, too, since the safety of your child is in focus here. 
• Willingness – No matter how perfect an individual seems for the role of a guardian unless they are wholeheartedly willing to embrace and fulfill that role, there is no point in including them in your estate planning. So, contact the person you are considering, ask if they would like to accept the role, and request an honest response.   

Once you zero in on a guardian and obtain their approval, consult an estate planning attorney to make things legally binding. They can suggest the right procedure to take things forward and prepare and file the relevant documents.  

Utilising Estate Planning Tools 

Estate planning tools, like the ones listed here, can help ensure that your underage children will receive the guardianship, care, and financial support they are entitled to when you are not around. 

• Will – In this legal document, you can clearly specify who will be the guardian for your kids in your absence and how your assets should be allocated to finance their upbringing. 
• Living trust – This can be set up during your lifetime and involves a trustee who will follow your explicit directions on the distribution and management of the assets for the benefit of your minor children after your demise. 
• Testamentary trust – This kind of trust is included in a will and activates after you pass away. In a testamentary trust, you can specify how your assets are to be used for the care of your minor children. 
• Public Provident Fund (PPF) – You can open a PPF account under the name of your minor child and contribute to it every year. After 15 years, when the account matures, your child can benefit from it or choose to renew the same. 
• Life insurance policy nomination – While such policies might not be deemed conventional estate planning tools, they allow you to nominate underage children as beneficiaries in case of your demise. However, include specific instructions on how you want the proceeds to be managed.  
• Fixed Deposit – You can open a fixed deposit account for your minor child with most banks in India. However, you or a guardian will need to manage the account till your child becomes an adult. 
• Demat account – It is possible to open a Demat account in your underage child’s name if you wish to invest in securities and pass on the benefits to them. However, the account must be operated by you or a designated guardian until the child turns 18. 
• Power of attorney – This helps you delegate important decision-making powers to an agent, caregiver, or custodian who is willing to take care of your minor child. This person will have the legal authority to make decisions regarding the child’s educational, health, and other needs.  
• Education trust – Such a trust can be financed with the assets you specify as a grantor and meet the educational needs of a minor child. 
• Advance healthcare directive – Since healthcare constitutes a major part of childcare expenses, having an advance healthcare directive enables you to designate someone who can make medical decisions on your behalf for your underage kids. 
• Letter of intent – Though this document is not legally binding, it is one of the estate planning tools you can use to guide guardians or trustees when it comes to fulfilling your wishes about the education, upbringing, and overall well-being of minor children.  

Picking the right tool or combination of tools is crucial to make sure your underage children don’t lack anything in your absence and can cope with the painful experience of losing a parent at an early age. 

Importance of Legal Advice 

It is advisable to consult an estate planning attorney when minors are involved since the associated legal considerations can be complicated. Unlike in estate planning, many additional factors might also enter the picture. Here are the ways in which a lawyer can make things easy:  

• Since the laws of estate planning can vary across jurisdictions, an experienced attorney can educate you on the different legal requirements and ensure that you comply.  
• An attorney can draft the necessary documents for the formation of a trust in compliance with legal standards. They can recommend a structure that complements your objectives. 
• Appointing a guardian for underage children can be a complex process, whereby an attorney can help you navigate all the rules and considerations. They can ensure that your guardian designation is enforceable and valid. 
• An attorney can explain the tax implications of all your estate planning decisions with regard to minors and otherwise so you can comply with tax laws and minimise taxes.   
• It is easier to draft a proper and valid will with the help of an estate planning attorney. This will minimise the scope of disputes and challenges later. 
• Your estate might undergo probate after your demise so that the will can be validated. An attorney can help the executor with the same and reduce complications. 
• Since minors cannot directly manage their inheritances, an attorney can help establish trusts, custodial accounts, and other mechanisms to secure the financial interests of your children till they become adults.  
• By consulting an attorney, you can cover various scenarios that might arise after your death. They can help you draft legal documents for different contingencies and assist with the appointment of alternate trustees or guardians. 
• Attorneys can offer personalised advice that is unique to your situation, challenges, needs, and goals. 

Learn More 

By now, you surely appreciate the importance of estate planning, appointing guardians, and utilising relevant tools to secure the future of your minor children in case both you and your spouse pass away. Start planning early and seek legal guidance to make the best possible arrangements.  

Tune into the next modules to learn all about smart investment, risk management, and ways to stay protected against financial fraud.