By Alan G. Orlowsky, J.D., C.P.A. and Jodi G. Wilson, J.D., M.A., C.C.C./SPL
(Don´t bother to read this if you want to leave your children´s future to chance!)
Since you are reading, you must understand the importance of planning for the future of your children. Every parent cares deeply about the well being of his or her own children. Indeed, they are your number one priority and love in life. If a child is not doing well then you probably are not doing so well, and when they all are doing well then things probably are pretty good. But for some strange reason, which I have a difficult time understanding, parents, far more often than not, fail to take the time to plan for the guardianship of their children in the event the unthinkable occurs and they are orphaned.
Protecting your children is something that comes naturally. You protect them from cold, heat, hunger, and pain. You´ll even endanger yourself to protect them and take a bullet if necessary. You plan for their education, their wedding, their health, and their future. But have you planned for their well being if you and your spouse or former spouse are gone? Probably not!
I am bringing this always timely topic to your attention now because it is the Holiday Season and a time of year when most families gather together. Although topics of conversation may touch on the dismal performance of the hapless Bears, planned getaways to warmer climes and New Year promises of weight loss, serious discussions amongst adults certainly is not taboo. As such, it is a good time to discuss amongst spouses, and other close family members the need to plan for guardianship in the event your children are orphaned. This is a distasteful topic that most individuals prefer to avoid, but it is also one of the utmost gravity. We are all aware that the odds of simultaneous deaths or near simultaneous deaths of both parents are small. So based on this fact, we rationalize our failure to plan. But, on the flip side, the consequence of such an occurrence is absolute devastation! I have been there, seen it happen, and it isn´t pretty!
The process of selecting a guardian for your children if neither you nor your spouse is able to act can be trying and frustrating. Nobody can raise them as well as you, not even your spouse. Everybody has faults and flaws and some are serious impediments to good child-rearing. However, ego and doubt aside, it is better to name a familiar family member or friend as guardian rather than letting the State of Illinois decide what´s best. As such, as a provision of your Will, you should name a guardian or co-guardians for your children, and at least one successor, in case your first choice is unwilling or unable to act.
Important considerations when evaluating whether an individual is a good fit as a guardian for your children are as follows:
If you have a disabled or special needs child you need to consider additional factors in naming a guardian. Will your disabled child be a disabled adult whose need for a guardian will last an entire lifetime? If so a guardian should be selected by the criteria listed above with emphasis given to the age and staying power of the guardian.
To plan for guardianship you also must plan for the financial well being of your children. A guardian may not have the financial resources to provide for your children and, perhaps, his or her own children simultaneously. Financial help is almost always necessary, so I advise my clients to establish an estate plan with trusts to provide for the children in the event of an untimely death. Such trusts are typically funded with life insurance and will provide for the support, including college, and the welfare of the children well into adulthood. There is no substitute for good planning and I advise my clients to plan now because once circumstances take over it is impossible to go back and re-set the clock!
Planning for the unthinkable protects those you leave behind and leaves the decisions to you – not to your relatives or a court of law. The decisions you make on guardianship, trusts, and overall estate planning will protect those you love and make the transitions you worry about much less daunting.
Alan G. Orlowsky, President of Orlowsky & Wilson, Ltd. in Lincolnshire, Illinois, has been counseling people on estate planning for 28 years. He previously worked for the IRS in its Estate and Gift Tax Division. He also worked for the Deloitte & Touche accounting firm, and he has taught taxation and accounting at Loyola University of Chicago, School of Business.
Al is a contributing author of the book 21st Century Wealth (Esperti Peterson Institute, Denver, 2000), and has written numerous articles on the subject of estate planning. Contact Alan Orlowsky by email or call 847-325-5559.