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Payments to a Guardian

May 23, 2013

Upon the death of both parents, a guardian for minor children will be appointed. Funds can be left to the children as described in the previous blog.  An additional provision can be included to provide the funds to be used for the children’s care by their guardian.  As in this and all legal matters, an attorney should be consulted to draw up the documents.

 

Following is an illustration of how this can be done:

 

  • The designated legal guardian of the children will receive a net after tax income of $3,000 [or any chosen amount] per month until the youngest child reaches age 21 and is not attending a four year college program; or if they are attending a four year college program or in the armed services, then until one year after they graduate, or are discharged from the service, or the child reaches age 24, whichever occurs earlier.  There will be no accountability of these funds.

 

  • The trustee will have the right to make interest free loans or mortgages to the guardian, if in trustee’s opinion, the purpose of the loan is to assure or provide for the comfort (to be defined as loosely or liberally as possible) of the person in fulfilling their responsibilities as guardian of the children. The loans could have a maximum principal stated such as $400,000, and can have a maximum term such as ten or 20 years, or one year after the guardianship ends.

 

  • The trustee will also have the right to withdraw principal or income at their discretion to apply for the benefit of the children or guardian if in the trustee’s opinion such funds would benefit the children or the guardian’s care of the children.

 

Reprinted from Getting Your Affairs in Order by Edward Mendlowitz, CPA ©2012.  Available for sale at www.Amazon.com and www.BN.com .

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