Should I Leave Money to My Children’s Guardian?
Should I leave money to my children’s guardian?
This is a question that I get a lot. People say, “Okay, I wanna leave $15,000, $5,000, $10,000 every year to the guardian. And sometimes they know how this works and sometimes they’re thinking this is the money that the guardian will be using to take care of my children.
The way things are usually set up with trusts, if we’ve got money left for your children at a base level, we have a health education maintenance and support standard. You can always add extra things and specific things that you would want the trustee to pay for, but the trustee is gonna be using that money for your children’s health, education, maintenance, and support. So if we are giving money to the guardian, it is not for them to use to pay for school, to pay for groceries, to pay for these things for your children.
It’s a gift and is it a great idea to give a gift to the guardian who you, you know, potentially having your children live with and making a big change to their life? Yes, it’s a great idea, assuming that you have the funds available. I would never, if you think, if you think that there is a question of whether there are enough funds for your children, I would not advise gifting to guardians and other people until we know your children are taken care of. But yes, if you have the funds available, a thank you gift is great.
If you have a number in mind, perfect. If you don’t, my suggestion is a yearly gift of whatever you think a vacation would cost. So that’s going to depend again, on your finances, but also you know, what you know about them. I’m not saying a six person European vacation unless that’s in your, you know, in your finances. But you know, if you think about okay, what would it cost to go to the beach? You know, we’re gonna figure my own children in there. Like, what is that one week vacation gonna cost, sort of a gift amount in that realm is a great choice, but it’s a gift to the guardian as a thank you. It’s not, you know, the only money.
Of course they could use it, they can use it for whatever they want to, they could use it directly on your children. But if it’s a gift to the guardian as opposed to money left to your children in trust, it is a gift to them and it’s not the money that they have to use for support of your children. And we can also do, a lot of times we put in provisions for if the guardian needs a larger car. So they drive a tiny car or they’ve already got some kids and now they need a bigger car. Your trust, your trustee can chip in for that. If they need a larger house, your trustee can chip in for that. Of course it gets tricky ’cause you want, you don’t want your trust to buy a whole new house. You want to chip in appropriately for an upgrade.
But again, that is different than a straight up gift to the guardian. So if you’ve got the funds, I love it. I, you know, often think of it as a yearly gift ’cause we’re gonna be holding this stuff in trust anyway. So it’s not a situation where it could all be closed, except for this one small yearly gift. But if you don’t want to leave a gift to the guardian or you know, having your parents as guardians and you realize that they would be hurt, that, you know, you felt like you had to pay them to do this, you know, no, don’t leave them a gift if they wouldn’t appreciate it. But otherwise, yeah, I think it’s a great idea.