There may be a good reason for the delay in making this decision
If you have children, you not getting your Will organised may be due to more than just procrastination;
Parents tend to delay making Wills because they struggle with picking the appropriate Guardian for their kids. Drew Browne Director Sapience
Choosing a Guardian (someone appointed to take care of your children if both parents die) can feel like navigating through a minefield of legal complexities and tricky family politics. Yet, in the worst-case scenario, it’s the most important decision you’ll ever make. It's time to get your estate planning sorted.
Don’t let a bad habit or concerns of a possible misunderstanding with a family member delay making the backup plan to protect your children any longer.
If this rings true for you and your family, here are some suggestions to help you get that sorted.
Make it clear and make it legal
Document your choice of who will be your children's Guardian in your family backup plan (what we call your estate plan).
Tip: A backup plan needs its own backup plan.
Choose a Guardian and then choose a Backup Guardian, just in case your first choice is unavailable or unwilling to step into this position. Appointing a backup guardian can help minimise family pressures because those people who form part of your backup plan, also need a backup plan.
'Nobody will be able to raise your children like you do'. We acknowledge that; now we can move past that. If you're gone, someone has to do it, and you are the best person to choose the replacement.
Appointing a Guardian for your children doesn't have to be forever
Consider making a decision for the next five years where your choice maybe your parents. After that period it might be more appropriate for a sibling to take that position (after they gain more life experience, finish travelling the world or when they settle and partner up).
Approaching the appointment of a Guardian for just the next 5 years helps bring a sense of perspective and reduces the procrastination that can arise when we want all our decisions to be perfect now and forever.
Tip: Remember your choice of Guardian will always have to be formally approved by the Family Court of Australia but your decisions now will certainly go a long way to influence the court as to what you want as a backup plan for your family, just in case.
Consider the values and philosophies of the potential Guardian
Choose a Guardian who shares your family's values and philosophies about life, raising children, approach to education and the various moral, social and cultural values you hold.
You can provide more background to your own attitudes and beliefs about these matters in your separate Letter of Wishes. This is a document safely held with your other estate planning and life insurance documents, just in case.
- Is the potential guardian over 18 years of age?
- Do they have genuine care and concern for your children's welfare?
- Are they physically able to do the job?
- Have you considered the practical aspects of parenting and ageing?
- Do they have the time?
- Do they share your own moral, cultural, social and or spiritual beliefs?
- Would your children have to move interstate or long distances to live with them?
Additional considerations for single parents
The Australian Family Law Act says both parents are responsible for the care and welfare of children up to the age of 18. The law presumes it’s best for most children if both parents co-operate and share equal, parental responsibility. The biological parent will have parental rights in the eyes of the law so making your plans and intentions known and legal today is part of the process of managing your estate and protecting your children tomorrow.
Additional considerations for modern families
If you're part of a blended family and share children from a past relationship, you may need to consider choosing different guardians for different children.
This can also occur if different children have different strong attachments to different adults outside the immediate family. For instance, one child may spend a lot of time with a grandparent want another child might be closer to aunt all uncle.
Special considerations for Co-Parenting
If you’re in a same sex relationship and you co-parent you’ll probably want to name your partner as the personal guardian of the children. Because courts may be unfamiliar with your family structure, consider making this clear in the letter of wishes to fully explain to the court why is important for your partner to be your children's personal Guardian.
Consider the practical aspects of parenting and ageing
It's important to consider the health and mobility of the person you may choose as your children's Guardian.
Consider the location of your Guardian
If your Guardian lives interstate, you may need to consider the emotional damage that occurs when children are forced to move home and school during the most chaotic emotional time of their life, the death of a parent.
You can read more about this in our speciality report that examines the statistical realities of the effect upon a child of the death of a parent.
Avoid procrastination through perfection
When choosing a Guardian for your children it's the big picture details you need to consider first.
Our experience is, don't get tied up worrying about the size of their current house or whether or not they have a spare bedroom etc. This is where the funding provision you make for your children, as part of the family back up plan, will come into play and provide the resources necessary, if needed.
Look beyond the obvious choices
When you're thinking about who might be appropriate as a Guardian, make a list of all the people you trust to care for your children, then work your way through the list and identify a reason why one may be suited to the task.
Tip: Think about who you're comfortable with your children spending the weekend with, then maybe a month, then two months in a year. This approach might provide insight into who you think would be most suitable at this time.
Relax and remember situations change and so can your choices
Who you choose to be the care Guardian and maybe financial Guardian for your minor children is never set in stone. You can change your mind whenever your choose. Experience indicates over time children usually develop different and closer bonds with individual family members or friends, while others bond around a shared activity or interest.
- We recommend you simply review your guardianship decisions every 3 to 4 years or as your circumstances change.
Remember the money part of the backup plan
Whenever you make a decision about giving someone else a responsibility for a possible tomorrow, your responsibility today is to make sure adequate funding is in place should that possible tomorrow arrive. This means you have a life insurance policy, perhaps a separate life insurance policy is established for the purposes of looking after the children, just in case.
What do other families do about money in this situation?
- Most families use a life insurance policy to help provide funding for their children as part of their backup plan. If there are different Guardians, they might use a separate policy for each to make funding provisions simple.
- Many families decide that insurance benefits are to be held in trust for their children (and not just placed in an everyday bank account for easy access).
- Many families set an age of 25 (or even 30) as being the age of majority when their children gain access to the proceeds of any insurance policy.
- Most families decide to set up a testamentary trust (that only comes into existence upon the death of the parents) to hold any money and assets on their children's behalf.
- Some larger families choose a caring guardian and a financial guardian. While this may be simply appointing multiple guardians with different skills, making this distinction clear in your letter of wishes can also help make your decisions clear to the Family Court later if needed. For example, your brother may be an accountant in a busy city firm, great with numbers but short on time, while your parents may be established and have the time, but really don't want the responsibility of managing large amounts of money in a trust for the children.
Remember, when it comes to the legal and financial side, whoever you nominate can always employ an external adviser to help them, in the same way the executor to a will can employ a solicitor to prepare the paperwork for signature etc.
“We've made the choice, now what?”
Once you have someone in mind who you’d like to appoint as Guardian for your children, sit down together to find out if it’s something they would even consider. It’s a big responsibility, so don’t ask them for an answer on the spot. If they don’t feel they’re up for the job, there should be no hurt feelings.
What's the ultimate result of all this work?
Ultimately, we want you to be comfortable saying;
“There's a family backup plan in place, it's funded and here are the name and contact details of our adviser if you need to activate the plan”.
May it never to happen, but now you will sleep better and be ready for the question that invariably gets asked by all children at some time; 'what happens to me if something happens to you?
Structure creates confidence for everyone
Get your family backup plan finally sorted today and call the people at Sapience to make that happen with you.