San Diego Estate Planning Lawyer Blog
If you have minor children, it is important to consider the estate planning implications of providing for them before they reach the age of 18. If you leave your children a substantial inheritance, it will be necessary to name a guardian for their estate until they reach the age of majority. A guardianship of the “estate” is separate from a guardianship of the “person.” The latter refers to the person who has physical custody of the child and oversees his or her daily care. A guardianship of the estate, in contrast, only deals with property owned by the minor child.
Family Member or Professional Fiduciary?
In many cases, a guardian of the person will also serve as guardian of the estate. But depending on the size and complexity of the inheritance that you plan to leave, it may make sense to name a separate guardian of the estate. For example, you might name a close relative to serve as guardian of the child’s person while designating a professional fiduciary to serve as guardian of the estate.
As an illustration, here is a scenario presented by a recent California case. The mother of a 13-year-old girl died in 2008. The mother had a revocable living trust and two life insurance policies that all named the daughter as beneficiary. Upon the mother’s death, a licensed professional fiduciary took over as successor trustee of the trust. A “professional fiduciary” is a non-relative who manages another person’s assets; in California, a fiduciary who serves multiple clients must meet certain educational and experience requirements.
In this case, the fiduciary serving as successor trustee petitioned a California probate court to be named as guardian of the daughter’s estate. A guardianship was necessary because the trust terminated upon the mother’s death. The child’s father objected. He had legal custody of the daughter and asked the court to also name him as guardian of her estate.
The court decided to name the professional fiduciary as guardian of the estate. As the California First District Court of Appeals explained, the guardianship estate was worth approximately $575,000 and the father “did not have the knowledge or experience to manage a large estate” while the fiduciary had “sufficient experience to serve as guardian.”
The guardianship terminated when the daughter turned 18. The professional fiduciary expressed concern that the daughter would be unable to manage her own finances at that time and suggested the probate court create conservatorship—basically a guardianship for adults—to prevent “dissipation” of the daughter’s assets. This apparently never came to pass and the guardianship ended. (The First District decision referenced above addressed a procedural issue related to the termination of the guardianship, not the fiduciary’s suggestion of a conservatorship.)
Need Advice From a California Estate Planning Lawyer?
Estate planning is always important, but it is especially so when you have young children. An experienced San Diego estate planning attorney can help you devise a will, trust, and supporting documents to ensure your children are provided for after your death. Contact the Law Office of Scott C. Soady today if you need to speak with a lawyer about your estate planning needs.