All About Estates

Guardianship Decisions – The Sequel

This Blog was written by: Natalie Rouse

Last week I wrote about some basic matters to consider when appointing someone as a child’s guardian.

The person named as a guardian in a will must have that appointment confirmed in court. Courts are more likely to accept the appointment of a parent as guardian versus a non-parent. However, if there’s no suitable other parent, or in the case where both parents die in a common accident, matters become more complicated.

At the time of signing their wills parents may believe that they have the right person in mind, but circumstances change and that individual may no longer be an appropriate choice. For example, the relationship with them could become strained over time or they could move out of the country. It may also be common for someone to initially accept and welcome the idea of becoming your child’s guardian as a “favour”, not imagining that it will ever come to fruition. It’s important to review this choice as time goes on and make sure both parents are still on the same page. There may be different ideas about suitable family members or friends. If multiple guardians are named, there needs to be confidence that they will be able to work together and clarification around what the desired arrangement will look like.

As well as this being an emotionally charged decision, there is also a financial consideration. When considering someone as a potential guardian for your children, it’s important to consider if the proposed guardian afford to look after the child on a long-term basis. Funds may be left to a child in trust, providing support for a period of time. In situations where a trust is contemplated there can be merit in appointing someone other than the proposed guardian to be the trustee of the trust. A key consideration is the ability of the guardian to work effectively with the trustee to ensure that the child’s financial needs are being met. Of paramount importance is the ability to put the child first, rather than acting in a self-serving manner. There is no financial benefit to acting as a guardian for a minor. As such, it may be advisable to consider leaving the guardian a legacy as part of your estate in order to acknowledge and thank them for the responsibility they are taking on if they are required to act. A trust company is a good alternative to act as trustee for a minor’s property.

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About Paul Fensom
Scotiatrust offers a full range of estate, trust and philanthropic advisory services designed to meet a client’s personal objectives and designed to evolve across a variety of life stages and financial events. Email: paul.fensom@scotiawealth.com

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