How to choose a guardian for your kids

No-one is going to love your children as much as you do, but what would happen to them if you were to die while they are still minors? Who would raise them?

If you're married, responsibility for the care of your children would obviously fall on your partner. But what if you're a single parent? And what if both you and your partner were to die at once? Who would you want to be the guardian of your children?

"A legal guardian is the person you nominate to take care of your children if both parents die before the children turn 18," says Elmien Pols of Private Client Trust, the fiduciary arm of Private Client Holdings.

Guardianship of minor children is something most of us would rather not think about. But if you fail to nominate someone to be the legal guardian of your minor children, they could end up with someone you would not have chosen, says Pols.

Christel Botha, fiduciary services manager at Alexander Forbes, says that if you haven't named a guardian in your will and you die, your family will decide who is best placed to take care of your children. Should a dispute arise among family members, they will have to battle it out in the high court.

If there are no family members willing or able to care for your children, social services will get involved and this could culminate in your children going into foster care.

Many people turn to a family member. However, being a relative doesn't necessarily make for the best guardian(s) and there are many factors to consider, says Pols.

When choosing a legal guardian, she says you should consider the following:

• The age and health of your potential guardian(s).

"Whilst you may be convinced that your parents are the perfect choice, they may be too old to run around after your children or handle the demands of a teen," says Pols.

l Values, including faith. "If you want your child to be raised in a certain religion then faith may be important when picking a guardian."

• How would your children "fit" into the guardians' family? Would your children get on with theirs?

• Morals, views on education, and parenting style. Are the guardians' morals and parenting style compatible with yours?

• In addition to considering how much the potential guardian(s) would love your children, how responsible are they when it comes to their career and their approach to money?

• Finances and overall stability. Do your potential guardians own their own home and have a stable job?

You shouldn't automatically opt for a married couple, says Pols. "Although they may seem more stable and equipped to care for children, divorce happens to the best of couples, so don't base your decision on someone's marriage. If you do choose a married couple, decide ahead of time which person would raise your child in case the couple splits up," she says.

And don't rule out relatives who live far from you. "Although it may seem too disruptive to move your children to a new town, province or even country, if the best person for the job lives elsewhere, then it will work out."

Pols says a nominee is not obliged to accept the appointment and to cover yourself you can also name a substitute guardian in your will.

Melony Jacoby, a Durban-based certified financial planner, says it's vital that the individual or couple you have in mind agree to being named as such before you name them in your will.

"It's important to engage with them to make sure they understand their role and the responsibilities that come with guardianship." She suggests a family meeting with the potential guardians, facilitated by a money coach or other professional.

"People are sometimes quick to say yes, without giving it enough thought. I always recommend they take time to think it through. The guardians also need to discuss with their children how they are likely to be impacted by guardianship."

While you need to be able to trust your guardian(s) with money, many financial advisers recommend that you nominate someone else to manage the inheritance you leave your minor children.

One way to do this is with a testamentary trust, or will trust, which comes into existence on your death. The trust, which is managed by trustees, exists for the benefit of the beneficiaries, namely your children.

Managing a trust involves making investment decisions, which can be onerous for the layman, so it's advisable to use a fiduciary practitioner who gets appointed as an independent trustee.

Pols says that by having an independent trustee attend to your children's financial needs, you are giving a qualified and objective party insight into the wellbeing of your children. "In such a case, the trustees of the trust will work together with the guardian in the child's best interest," she says.

In other words, the roles of guardian and trustee are separated, with the guardian looking after the care of the children and the trustees taking care of the finances.

"A guardian might not have the financial acumen to manage the trust or invest the assets. I also recommend that the trustees be recorded in the last will," says Jacoby.

Conflicts of interest can arise when the guardian and the trustee of the testamentary trust are the same person, she says. "I advise that an independent trustee be appointed who can provide an unbiased view when it comes to money decisions. The independent trustee needs to be an experienced professional trustee who understands their fiduciary role and responsibilities."

There is no minimum or maximum number of trustees, but it's preferable to have three so that if there is a disagreement among them, a stalemate won't arise.