Women and Money: Trustees to Manage Funds for Children’s Benefit


In addition to appointing guardians to take care of your children you must ap­point trustees to manage funds for the children’s benefit. My bias is not to name the guardian as the sole trustee. There is too much risk that the lines will blur and the children’s funds may be used to pay for more of the household expenses than they should. It could also work the other way. Sometimes if the guardian is the sole trustee, the guardian may not feel comfortable using any of the funds for the increased household expenses, and resentment builds up because the guardian is shouldering more financial responsibility for the increased household expenses than he can or should bear. For those reasons I advise having more than one trustee (with the guardian serving as one, but not the only, trustee).

Decisions will come along, such as moving to a larger home. Should your children’s funds be part of that? If so, do they ever come back to the children? When will they come back? When the house is sold? When the guardians die? If the guardian has children and they are not able to attend the same schools as your children (be­cause, due to your death, your children have more assets), what happens then? Should the trust funds be used to pay for the tuition of the other children so that resentment does not ensue? The guardian is doing you and your children a real favor by taking the children on and bring­ing them up. Should the guardian be compensated? If so, by how much? These are the kinds of decisions that the trustees who are in charge of the money will be making. Those decisions should be made with input from the guardian, but there should be checks and balances built into the system.

I recommend that, in addition to the legal documents, each year you write a memo to the trustees and put that memo in a sealed envelope that is left with your original documents. In that memo I encourage you to be open about what you see as each child’s strengths and weaknesses, what you value, what you wish your children to enjoy, where you feel it is appropriate to spend funds and what things you do not consider it appropri­ate to spend money on. Everyone has a different sense of what is appropriate for education, for example – public school, private school, boarding school, military school, or parochial school. You cannot assume that others will automatically know your preference. It is your responsibility to provide as much guidance as you can. The guardian and the trustee will feel much more comfortable exerting authority when they know it is in line with what you would have done. Each time you prepare the informal annual memorandum about your child, you may choose to shred the prior year’s memo and keep provisions that may no longer be appropriate private and confidential.

Patricia Annino is a sought after speaker and nationally recognized authority on women and estate planning.  She educates and empowers women to value themselves and their contributions in order to ACCOMPLISH GREAT THINGS in the world – and in so doing PROTECT THEMSELVES, those they love, and the organizations they care about.  Annino recently announced the release of an updated version of her successful book, Women and Money: A Practical Guide to Estate Planning to include recent changes in the laws that govern how we protect our assets during and beyond our lifetime.  Annino’s book is an exhortation, resource and trusted companion for women in all facets of life.  To purchase the book visit:  http://amzn.to/hOHuEV or for more about Annino, visit: www.patriciaannino.com


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