If you’re having a tough time deciding who to name as guardians for your kids, you're not alone. Should you go with a close family member or someone who’s better with money? Typically, you don’t have to pick between a money savvy uncle and a loving sister to care for your kids. You don’t have to go with only one guardian of the person and estate of a minor child, explains, NJ 101.5 in “Choosing guardians for your minor children.”
You usually have the ability to appoint one person as a guardian of the person—he or she will care for your child—and designate another person as a guardian of the estate—this person will care for your child’s assets. Typically when minors are part of estate planning, the parents’ assets are put into trust until the minor reaches a specified age(s) when distributions are authorized or required to be made. As an illustration, the trust can dictate that a third of the balance be distributed when the beneficiary reaches age 25, a third when he or she reaches age 30, and the remainder when the beneficiary reaches age 35. At that point, the trust will be terminated.
The trustee will invest and distribute the funds at his or her discretion for the support, education, health, and welfare of the minor. If you go with two different people as named trustee and guardian, it gives them some oversight to ensure that neither one breaches his or her fiduciary duties.
So, you can select a person best suited to care for your child to be the guardian, and a person more suited to handle finances can be named as trustee.
In cases when the trustee and guardian are not the same person, think about naming people who’ll be able to work together. They’ll need to talk about the child’s needs and the assets available in the trust fund. If you choose two people, the guardian won’t be spending beyond the trust’s ability to reimburse.
You should also consider preparing a letter to your trustee and guardian, detailing your intent as to the distribution of the funds on your child’s behalf. This way, they’re both aware of your intent for the use of the funds.
Reference: NJ101.5 (October 24, 2016) “Choosing guardians for your minor children”