Legal Blog

The Weekly Scenario from Steve Shane – 6.17.13

Question:  Should the same person who is raising my children as guardian also be in charge of the financial assets? Answer:  Often times the people who are the most nurturing are not necessarily the best at handling money.  That being said, naming the same person as guardian of your minor children and the Trustee of the same minor’s trust may also not be ideal. Clearly, the dual role of guardian and Trustee presents the potential for conflicts of interest. For example: 1. You name your brother and his wife as guardians and Trustees of your minor children’s trusts.  Is it reasonable if they use trust money to put an addition on their home to accommodate the additional children into their home? 2. Is it reasonable if they use trust money to buy a new vehicle for the family? 3. Is it reasonable if they use trust money to put all of the children through school (even their own) in order to treat all children equally? The conflict would be avoided if you appoint one individual as guardian and another to manage the children’s trust funds.  If there is cooperation, when the guardian needs money for the children, he or she simply contacts the Trustee and then determines whether the expense will be covered. Keep in mind that the Trustee has the ultimate say in the matter so any specific instructions or guidance in your documents can be important to clarify your intent. Instructions can include anything from whether it is reasonable to buy a larger house to using the funds for the whole family to take vacations. Comment:  I generally like to give very liberal discretion to the Trustee to use funds to care for the children in any way the Trustee deems advisable or necessary.  My rationale is that if you trust the people you are naming, it is likely that they will be able to make reasonable decisions knowing what you would have wanted. Steven E. Shane Principal Offit│Kurman Attorneys At Law 301.575.0313 Washington 443.738.1513 Baltimore 410.218.9339 Mobile 301.575.0335 Facsimile Please note the above material discussed is intended to provide only general information. Do not, under any circumstances, solely rely on this information as legal advice. Legal matters are often complicated. For assistance with your specific legal problem or inquiry please contact me directly.