Even though your children are adults and have children of their own, hopefully they still look to you for good counsel.  One of the best pieces of advice you can give your children is to plan in their wills for who takes care of your grandchildren if something happens to both of your grand children’s parents.

Your Grandchild’s Physical Care

In your child’s will your child may name the person or persons who will be responsible for raising your grandchild if both parents die before your grandchild is 18 years of age. This person is called your grandchild’s “guardian.”

Being a guardian is a weighty responsibility.  To properly select a guardian, your child needs to think about who shares their values and would do the best job bringing up your grandchild.  My clients usually consider their parents first, depending on how young and fit their parents may be.  Then they often think about whether any of their siblings might make a good substitute parent for their child.  It is a good idea for your child to name their first choice for guardian and then name at least one alternate choice, in case their first choice cannot serve for some reason.

Your Grandchild’s Financial Care

Since a minor cannot own assets, if both parents die and have not planned ahead in their will, someone will have to bring a lawsuit in court to petition to be appointed the guardian of your grandchild’s estate.  The guardian will have to get a bond, will have to file an inventory of assets with the court and get court approval for everything the guardian does on behalf of the grandchild.

This is an expensive process because it involves so much court supervision, but it goes from bad to worse because the guardianship only lasts until your grandchild is 18 years of age.  You do not need too wild an imagination to think about all the mischief and trouble an 18-year old can get into if he or she suddenly receives a large inheritance.

Your child can avoid this problem by creating a trust in his or her will that holds your grandchild’s inheritance, if both parents die before they want their child to inherit.  Your grandchild’s inheritance from his or her parents can stay in trust for however long they feel is appropriate.  Typically, when I am helping clients, we start distribution of principal from the trust at around 25 years of age, figuring that until then the trustee will be applying the funds to pay for the young person’s education.  Often, we structure the trust so the young person gets half of the trust principal at 25 years of age.  We anticipate they may make mistakes in investing or spending it, but will learn from those mistakes.  The young person can then receive the second half at, say, 30 years of age and hopefully have a better understanding of what they need to do to preserve the rest of the inheritance.

Your Grandchild’s Trustee

While the trustee is in charge of the trust, the trustee will make distributions for the benefit of the child, and exercise the trustee’s good sense to determine the child’s needs.  The trust does not have to be court supervised and thus a trust is not nearly as expensive as a guardianship of the estate for the child.  A parent does need to think through who would make a good trustee.  If there are sufficient assets, I strongly urge my clients to use a bank trust department rather than a family member as trustee.  This is because being a trustee is a lot of work.  A trustee has to keep accurate records of assets and expenditures.  The trustee has to pay bills for the child and file a tax return for the trust.  The trustee will be personally liable if the trustee does not invest the trust assets in a fiducially sound manner.

One reason many of my clients think first of a family member when they are thinking of a possible trustee is because a family member will have the “personal touch”, because they know and care about the child.

That is a valid concern, but one way to obtain the professionalism of a trust department and still keep family involved in the process is to give a trusted family member the ability to change the bank trustee if the family member does not like what the trust department is doing for any reason.  Also, the child’s parent can require the bank trustee to consult with the family member about decisions on how the trust money should be used to benefit your grandchild.  In this way, one gets the professional skill of the bank trust department and the “personal touch” of having a family member or friend being in control of the trustee.


You can continue your role of giving your children good counsel by urging them to have a plan in place to protect your grandchildren, if the unthinkable happens, and your grandchildren lose their parents while your grandchildren are still young.

Elizabeth A. Perry, a member of the National Academy of Elder Law Attorneys, has been helping Clark County residents with their estate planning needs for over 20 years. Her practice emphasizes wills, trusts, probate and Medicaid planning. You are invited to call her to schedule an appointment or sign up for a class at (360) 816-2485. ©Liz Perry 2015

(The above should not be construed as specific legal advice and is intended for general information purposes only)

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