You have worked hard to raise your children well. As a good parent, you have contemplated the possibility of your future incapacity or untimely death and named a legal guardian in your estate plan. The legal guardian, known as the guardian of the person, will be responsible for every aspect of your children’s well-being — including food, shelter, clothing, education and medical care.
But what if the guardian you appointed does not have sound finance and money management skills? Regardless of whether you have significant financial assets, it is vital to establish who will best manage any money or property your child stands to inherit.
How you can protect your child’s financial future
In Tennessee, minors cannot take control of any money or assets they stand to inherit until the age of 18. Therefore, it is important to appoint a “guardian of the estate” who will be responsible for managing your child’s finances.
The primary responsibilities of a guardian of the estate include:
- Managing the minor’s property
- Preparing and filing income tax returns
- Making prudent and responsible investments
- Paying for the minor’s health and education expenses
- Filing annual financial and accounting reports with the court
- Recording all income disbursements of the minor’s funds
A guardian of the estate will preserve, manage and allocate the estate according to the law. If a guardian of the estate is not appointed, the state may have to court-appoint guardianship to manage and supervise your children’s estate.
Some families feel the need to name both a guardian of the person and the estate. Some consider it to be a smart choice since the person who is best suited to tend to your child’s emotional and developmental needs might not have the money management skills that may be required of the guardian of the estate.
Selecting a guardianship for your children is no small matter or easy decision. You can protect your child’s inheritance by naming someone as the guardian of the estate who will manage the funds until the child reaches the age of entitlement. Consider seeking legal advice regarding the appointment of a guardian of the estate and what steps you can take to safeguard your child’s inheritance.