Parents: Do you ever worry about what would happen to your minor children if you both were to die in an accident? That very concern draws many relatively young people to my offices to start planning their estates.
In Virginia, if one parent dies, then the surviving parent usually will have sole guardianship of the persons (as opposed to the property) of their children, under the doctrine of “natural guardianship.” If both parents die, then there usually will be a court action to appoint a Guardian for the children and for the children’s property.
In a guardianship proceeding after the death of a child’s parents, a Virginia court will always look first to the desires of the parents as expressed in their Wills. By statute, a Circuit Court must appoint as Guardian the person appointed in his father’s or mother’s Will, unless this would not be in the best interests of the child. No other document or expression of preference can speak with the authority that Virginia law invests in a properly drawn and executed Will.
When preparing to appoint a Guardian in your Will, consider: Would this person be able to care for your children until they are 18? Would he or she insure that your children are educated as you would wish, and raised in your family’s religious tradition? Would your children have to move away from Northern Virginia to live with this person? Even if a close family member turns out to be suitable and willing, might there be an even better choice?
You also should consider, and nominate in your Will, one or more alternate Guardians, in case your first choice is later unable to assume responsibility for your children. And you should write a letter for your potential Guardian, setting out in as much detail as you wish how you would like for your children to be brought up. It is to be hoped that such a letter will never have to be delivered, but you should draft one and make arrangements to deliver it to the Guardian in the event of your death, and you should update it regularly.
Naming a Trustee in addition to a Guardian
Is the best person to appoint as “Guardian of the person” of your minor child likely to be the best person to appoint as the caretaker of the money and property she would inherit from you if you were to die before she reached adulthood?
In most cases, the answer is no. It is prudent for you to name a different, trusted friend or relative as Trustee to hold your children’s inheritances in trust and to pay or apply the income and assets for their benefit — that is, for their education, medical care, support, and other needs — until they are old enough to manage their affairs themselves. If such money and property is likely to be substantial in amount — say, $100,000 or more — you probably should name a co-Trustee as well. A co-Trustee, such as a financial planner or CPA for small estates or a bank or trust company for larger ones, can handle professionally the management and conservation of your children’s inherited property for about the same fees as you are probably paying your financial planners during your lifetime.
I include a contingent child’s trust in every Will and living trust, even for clients whose children are grown, or who are leaving their estate to their adult relatives and friends. Why? Because an adult beneficiary of yours could predecease you, or die very shortly after you, leaving his own minor children or other young relatives who would then inherit the share of the estate intended for their parent.
(Besides assuring competent money and property management, properly-designed trusts can also provide a substantial degree of lifelong protection against your children’s assets being taken by creditors, or by fraudsmen, or by disgruntled spouses in divorce actions. More about that here.)
Special issues for divorced or remarried parents
After a divorce, if either parent dies, then under Virginia law the surviving parent normally will have full custody of the children (even if the deceased parent had primary custody) unless a court finds that the survivor is not a “fit and proper person” to have custody. If one parent believes that the other should not have sole custody, he should plan in advance. Other family members might need to be prepared to petition the court for a third-party guardianship in the event of the custodial parent’s death.
In addition, if a deceased parent fails to name a Trustee or “Guardian of the estate” for any property inherited by a child, the surviving parent will normally be appointed to manage and control the money. Since many marriages fail because spouses do not agree about financial matters, divorced parents often prefer to leave a child’s property to him in a trust managed by a third person, working with an institutional trustee (such as a bank trust department) if the estate will be substantial.
Special consequences of intestacy
Divorced or remarried parents who die “intestate” (that is, without a valid Will) can leave their survivors unexpectedly bereft – or unexpectedly enriched. If you were to die intestate, leaving one or more children who are not also your surviving spouse’s descendants (most commonly, children from your prior marriage – whether or not they live with you, and whether or not they are adults or minors), under Virginia law all of your children (and grandchildren whose parents have died) would split two-thirds of your estate at death, while your surviving spouse would take only one-third. Moreover, your surviving spouse would be required to apply to the court to be appointed as a guardian of any property left to any minor children of you and your spouse.
(Gentlemen: if there is a likelihood – even a remote one – that you might have living descendants whom you and/or your spouse don’t know about, please reread the preceding paragraph carefully.)
Stop and think for a moment about how the statutory “default” plan described above would affect your family. If the outcome is not acceptable to you, then you need a properly drawn Virginia Will and trust.
“My hair stands on end at the cost and charges of these boys. Why was I ever a father! Why was my father ever a father!” –Charles Dickens