Guardians: What You Should Do to Protect Your Kids
By by Martin M. Shenkman, CPA, MBA, JD
Angelina Jolie Takes the Kids to See The MuppetsWhat Should She (and you) Do To Protect Minor Children?Money Matters Radio – Muppet Estate Planning
By: Martin M. Shenkman, Esq.
Angelina Jolie Takes the Kids to See The Muppets! Today 4:54 PM PST by Tierney Bricker
Is there anything better than Christmas in New York City? How about a family movie date!
That's exactly what Angelina Jolie, sans Brad Pitt, did on Saturday in Manhattan with Pax, 8, Zahara, 6, and Shiloh, 5.
So what estate planning should Angelina be thinking about in between the scenes about Tex Richman trying to drill oil under the Muppet theater? Angelina should have in place, all of the following:
A will designating guardians and successor guardians to care for her children in the event she dies. There are two types of guardians: guardians of the person and guardians of the property. Most people don’t make the distinction. But better than appointing separate guardians, which few people do, is to appoint a guardian for the child and trustees to manage the money left for the children.
Celebrities, and many others, often face an issue. The wealth they leave to their children in trust can be exponentially greater than the wealth those they name as guardians posses. How much of an issue this can be depends on a myriad of factors. If the people who are the best choice for guardians really have modest wealth this can raise practical issues. Is the house they live in adequate to also house the children? Is it adequate that a trustee can make distributions to benefit the children? Some people leave bequests (or use life insurance) to benefit the guardians. Another approach is to add express provisions to the trust created for the children authorizing distributions not only for the benefit of the children, but even distributions to the guardians which may benefit the children. For example, the trustee could be expressly authorized to make distributions to the guardians to improve or enlarge their home to provide for a quality of life desired for the children.
Always consider naming at least one independent trustee that is not related to the guardian. That is important to provide a check and balance on the guardian. For example, some people name a guardian, and then name the guardian and an independent person together to be co-trustees.
If there is concern about whether a guardian will really be capable, a second check and balance can be added. The trustee could be required to have an independent social worker interview the children in the home in which they live twice a year and provide a written evaluation to the independent trustee. Celebs in particular should consider these extra precautions.
Consider where the guardians live. Should you name guardians that live in your area so that your children can stay in the same schools and keep the same friends. Stars face another issue that makes this decision so challenging? If the children stay in the same area, will it make it more difficult for them because of the paparazzi or might it be better to have the children moved to a new area where the location, and hence their lives, may be less subject to media attention?
Too often celebrities don’t address these issues resulting in court battles of selection of guardians and a media circus if something happens. Careful planning can minimize and even avoid much of the media attention which can be so damaging to all involved.
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