Who will take care of your kids if you die?

By Liz Pulliam Weston
Source: http://moneycentral.msn.com/

This is an article written by an American for Americans. However, it is highly relevant in the South African context and well worth the read.

Deciding who will raise your young children if you should die often is a tough task — so tough that many parents never do it. Some just procrastinate, while others find themselves deadlocked, unable to agree with their partners over a suitable candidate.

This inability to choose leads many parents to abandon any attempts at estate planning, attorneys say, and is among the reasons that 57% of Americans don’t have a will.

“People who can’t agree on guardians won’t do anything,” said estate planner Colleen Barney, an attorney in Newport Beach, Calif.

Your procrastination could take a toll on those you should most want to protect: your kids. Consider these outcomes:

5 tips for choosing a guardian
Nan Mead of Greenwood Village, Colo., wanted to avoid those fates for her son, Trevor. A single mother since Trevor was 10 months old, Mead put aside her differences with her ex-husband so they could choose a guardian to replace them if they both should die. Mead and her ex each made lists of the criteria they felt were most important before meeting to go over candidates.
“It forced me to think about what was really important to me, in terms of how my son might be raised,” said Mead, who works for the National Endowment for Financial Education. The list also imposed “a degree of logic on a task that rather naturally tends to be driven by emotion.”

If you’re still trying to decide, estate planning attorneys recommend the following:

Ø       Think outside the box. Many people name their siblings, but you also can consider close friends, neighbors or even the child’s grandparents, if they’re relatively young. Some even name the oldest child to look after the others, although Barney cautions against this for most families. “Junior’s just pledged the frat, and now gets his little brother and sister,” Barney said. “That’s a lot of responsibility.”

Ø       Separate the functions. Some people are great at raising kids but lousy with money — or vice versa. Fortunately, you don’t have to find someone who can do both. Naming separate people to handle the kids and the money is often all it takes to end an impasse, said Los Angeles estate attorney Jon Gallo, co-author of “Silver Spoon Kids: How Successful Parents Raise Responsible Children” (McGraw Hill, 2001).

“Most of the arguments (stem from) a lack of understanding of the two functions,” Gallo said.

Even if your candidates are good at both, you might still want to name somebody other than the guardian as trustee of your child’s money. Many attorneys recommend naming a separate trustee so that there will be some checks and balances over how the money is spent.

Ø       Choose one — but have a backup. Attorneys typically discourage their clients from naming couples as guardians. If the couple splits up, it could cause a legal battle over who gets your child. (Besides, many fights over who to name as guardian stem from one partner’s dislike of a spouse. You may be OK with your wife’s sister, for example, but not be wild about the idea of her husband’s getting your kids if the sister should die.) If you’d be truly happy with either person, name the person you want most as guardian, and the partner as the backup.

Ø       Consider your ex. Here’s an unnerving fact for many single parents: If your ex wants the kids, there’s little you can do to prevent that from happening unless your former spouse has serious problems such as documented mental illness, chronic drug or alcohol abuse, or physical or sexual abuse of the child. If you’ve remarried but your current spouse hasn’t adopted the children, it may still be an uphill battle to prevent the children’s natural parent from taking over.

You should still name a guardian to serve if your ex can’t or won’t, however. And if you really think your ex is unsuitable, you can include a letter with your will to explain your feelings to the judge.

Plan to revisit the issue. You also can, and probably should, reconsider your choices as your child or children grow. You might want your married brother, who’s great with little kids, while your own are small, but be willing to consider your spouse’s unmarried sister when yours are more independent. Illness, death or divorce can change your feelings as well.

Mead and her ex originally agreed that his sister would be their son’s guardian, with Mead’s sister as a backup. Mead’s sister already had four children, while her sister-in-law had only one.

A few years later, however, their first choice developed cancer and had a poor prognosis.

“We switched the two couples, naming my sister and her husband as the primary guardians,” Mead said. The sister’s house was also less crowded: “By then, one of her children was in college away from home.”

How to narrow your choices
Still having trouble deciding? The following list of questions may help you solidify your feelings and help resolve any deadlocks, said Margaret Gallagher Thompson, chair of the estates and trusts practice group for Cozen O’Connor, a Philadelphia law firm. Thompson uses a similar list with her clients and often finds they’ve reached agreement by the end.

Who already has a good relationship with the child? Losing her parents will be traumatic enough. You don’t want to send your child to live with people she doesn’t know, Thompson said, unless you absolutely can’t avoid it. If yours is a blended family or you have children of very different ages — a toddler and a teenager, for example — you may well want to name different guardians for different children. You’ll have to weigh their relationships with potential guardians against the possible trauma of splitting them up.

Where do they live? Uprooting a 5-year-old may not be as big a deal as uprooting a 15-year-old, but either can be difficult. Even a young child can develop close bonds to friends, neighbors and nearby relatives. If moving is inevitable, you may want to give more weight to the guardian who will be able to help him maintain his ties.

Do they share my values? Two of the most important issues, attorneys say, are discipline styles and feelings about education. You’ll be happiest with guardians who share your values about both.

How about their age and health? These are the factors that rule out many grandparents, but even younger prospects might not be up to the task of raising a child to adulthood. “It’s a long haul to age 18,” Thompson noted.

Are there other children in the house? Many people choose guardians who already have kids. But how many do you think is ideal? “Some parents feel strongly that they wouldn’t want their two children to become the fourth or fifth child in a household that already has three,” Thompson said. “Others might like the idea of their being with lots of cousins.”

How do they feel about being named guardians? This may come as a shock, but your top choices may turn you down. Guardianship, after all, is a huge responsibility, and not everyone will feel up to the task. Discrete discussions with your candidates could rule some out, which might make your decision easier. You may, of course, wind up having to explain to the also-rans why they weren’t chosen, which will require even more discretion.

How are they fixed financially? Ideally, you’ll have enough life insurance and assets so that raising your child won’t be a financial strain on your guardian. But what if that’s not the case? Or what if your guardian is less economically well off than you are?

You could be creating an awkward situation for your child. If there isn’t enough money to go around, your kid might be seen as a burden. You could be setting up just as many conflicts if your child is richer than the children she lives with. It’s hard to explain to children why one gets to go to private school and buy designer clothes, while the others don’t.

Gallo has set up trusts that attempt to ease this latter situation by providing money for the education of the guardian’s children or for the guardian to build or buy a bigger house.

If you’ve gotten this far and still can’t agree with your partner on whom to choose, consider giving in to your partner’s wishes. Unless you believe the potential guardian won’t love your child, it’s better to name someone — even a second choice — than no one at all.

“The most important thing,” said Thompson, “is that the child should be in a loving, caring environment.”