6 Tips for Supporting Estate Planning Clients in Choosing Guardians for Minor Children

Choosing guardians for their minor children is one of the hardest decisions some clients have to make in their estate planning. I have to admit, even as someone experienced in the estate planning process who has had this conversation with clients hundreds of times, this was one of the toughest decisions I personally had to make for my own estate plan.

My Story

My husband and I have mirror wills.

We first prepared our wills together when we were living on the Gold Coast, with my husband’s parents living close by. My in-laws were a tremendous help to us after our son was born, and my son developed a beautiful bond with them. So it was the obvious choice to name my in-laws as the guardians for our son if my husband and I both passed away.

Three years later, we made the big decision to move to my hometown of Bundaberg, a five-hour drive from my in-laws’ home.

We were expecting our second son, so it was time to update our estate planning documents. This time, choosing who to nominate as the guardians of our children was not as simple.

My husband and I did not think it made sense to keep my in-laws as guardians for our sons anymore, especially for our youngest son, who did not have that same close relationship with them as a result of growing up five hours away.

At the same time, figuring out who was right within our Bundaberg community was also really challenging.

We had to consider the age of my parents and the burden on my siblings, who have demanding jobs and children of their own. We had to think about who could actually accommodate two more children into their home.

Settling on the best guardians for our two little boys was a struggle.

There just was not an obvious choice for us.

I really have to give a huge shout-out to a lawyer in our TT Precedents Club membership, Lucy Percy of Head and Heart Estate Planning, because she has created a free online course on her website supporting people with the decision of choosing guardians for their minor children.

My husband and I watched the course, and it really helped us find some clarity.

You can watch the free Head and Heart Estate Planning Course here: https://www.headandheartestateplanning.com.au/guardian-free-course

In her course, Lucy guided us to write down the value systems and the specific criteria and characteristics we felt were important for our children's guardians to possess.

We had to independently write our own lists of people in our community who we thought might be a good fit for the role, and then come together to see where our lists overlapped.

Going through that exercise took some discipline, but we finally found a plan that we believe will work for our family.

We managed to get over the inertia that this decision was causing and update our wills before our second son was born.

6 Tips for Supporting Clients in Choosing Guardians

When assisting clients in choosing their guardians, the following points can serve as essential guideposts:

1. Identify Guardians Who Act in the Best Interests of the Children

It’s helpful to consider the main qualities that are important for a guardian.

In my opinion, the qualities that should be prioritised in a potential guardian are:

• Trust: Confidence that they can be trusted implicitly to act in the best interests of the children
• Capacity: The ability to manage the day-to-day responsibility of including the children into their household
• Values: Alignment of core life values
• Parenting Style: Similar parenting styles
• Beliefs: Alignment of religious or cultural beliefs

If the guardians truly prioritise the children's well-being, most other challenges can be resolved.

2. Separate the Roles of Financial Controller and Guardian

We cannot always expect one person to possess both the deep personal care required of a guardian and the necessary financial acumen required to administer the estate.

Thankfully, these roles can (and often should) be held by different people.

It can often work well to nominate different individuals as the financial controllers and the guardians for minors. Together, the financial controllers can provide checks and balances on the guardians’ proposed expenditure, preserving and protecting the inheritance for the minors.

Similarly, the guardians can advocate to the financial controllers on behalf of the children to ensure that the inheritance is available to fund their lifestyle, education, and maintenance needs, always keeping the children's best interests at heart.

Check out this blog post for tips on Choosing Financial Controllers.

3. Funding via Life Insurance

Asking loved ones to take on the care of your children is a massive responsibility that will drastically change their lives.

One way to ease that transition is to ensure there is adequate funding through the estate plan. For many clients, this is where life insurance is vital.

For many testators, life insurance can be a relatively affordable tool to inject some additional liquidity into the estate (especially when held through superannuation).

Ensuring there is a large cash injection into the estate can make all the difference for the children and the guardians to ease the huge life change for all parties.

For instance, clients often overlook that the guardians might need to purchase a larger car to fit extra kids, bags, and bikes or even add an extension to their home to accommodate everyone.

The last thing a testator wants to do is create financial stress for their guardians, on top of the grief and juggle of welcoming the children into their home and family.

4. The Power of a Letter of Wishes

A Letter of Wishes is a morally binding document that accompanies the will. While not legally enforceable, it allows clients to "speak from the grave”.

It is natural for guardians and financial controllers to bring their own values to their responsibilities and duties. However, the Letter of Wishes can be used as a tool to provide the guidance needed for the key people in the estate plan to reduce conflict and increase clarity about the testator’s wishes, over and above what is documented in the strict legal structure of the will.

A Letter of Wishes is also the ideal place to discuss the client’s values.

Some examples of the types of information and guidance that can be included in the Letter of Wishes are:

• Preferences for religious or spiritual upbringing
• Directions about how to maintain relationships with various family members, including funding for travel
• School and education preferences
• Whether the inheritance should be released to purchase a brand-new or second-hand car for the children once they reach driving age, or if the children should work first to learn the value of money
• Funding for school excursions and travel
• Tertiary education funding
• Medical treatment preferences

The beauty of this letter is that it is straightforward to update, and the clients can take responsibility for keeping it up to date to reflect the regular changes in their lives.
It’s important to note that important legal changes like the identity of the guardians or financial controllers cannot be changed via the Letter of Wishes.

Reminding clients of this flexibility created by the Letter of Wishes can help prevent the panic that their decisions are "locked in stone”.

5. Homework for Clients

For clients who truly do not have someone close whom they feel comfortable nominating as guardian for their minor children – you may need to have an uncomfortable conversation with them. This arises frequently when the ideal guardians live overseas, or after a relationship breakdown.

In these cases, clients may have some “homework” to do. If there are no ideal guardians within their current community or relationships, they may need to proactively work on strengthening those relationships.

Moving and making friends as an adult is daunting and requires vulnerability.
However, if a client’s goal is for their children to grow up in their current town, they may need to confront the difficult truth that they need to step outside their comfort zone to build the connections necessary to nominate a local guardian.

6. Contingency Planning

It’s common for clients to feel stuck with the decision of whom to appoint as guardians of their children once they start thinking about planning for different contingencies.

Nominating the children’s grandparents is a popular choice for many; however, clients often worry that there is only a narrow window where the grandparents will be suitable guardians, and there will come a time when they can no longer manage the chaos that comes with having children in the home.

Given that estate planning must account for future changes, I often ask clients: “If you had died a month ago, who would be the best guardians for the children?”

We then build the plan around those immediate preferences, while factoring in “what-if” scenarios.

It is easy to include substitute guardians in the event that the first preference guardians are no longer able to take on the role. Letting clients know that we can plan for multiple scenarios can provide a lot of peace of mind around the decision.

Understanding Court Intervention

Unlike other parts of a will, the nomination of a guardian is essentially an "expression of wish”.

A court can override it if they feel the choice is not in the best interests of the minor.

While the testator’s preference usually stands if everyone is comfortable, family disputes can lead to a court review.

This is another reason why separating the guardian and financial controller roles is advantageous. By using a simple trust or a Testamentary Discretionary Trust, clients can ensure that even if a court chooses a different guardian for the children, their chosen financial controllers still manage the inheritance. This prevents a situation where an untrusted person gains control over both the children and the inheritance.