Guardian and Trustee being the same person?

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Posts: 306
Joined: Mon Jul 15, 2013 7:43 pm

Guardian and Trustee being the same person?

Post by notmyhand » Fri Jul 13, 2018 6:36 pm

Dh and I are expecting and are updating our simple wills to include pour over trusts so that our child doesn't inherit directly. We know who we want as the guardians but have no idea who to choose for the trustee - none of our friends or family members share our financial goals/visions but our net worth is not large enough to get a corporate trustee involved. We trust the guardian's we chose to look out for the best interest of the kids so I'm thinking to name them trustee as well. However, I can see why it would be a bad idea - no check and balance system but as long as my kids are raised correctly, maybe it doesn't matter? How has everyone else handled it and anyone regret making the guardian and trustee the same person?

Thanks for the help!

Posts: 67
Joined: Tue Jan 26, 2016 12:36 pm

Re: Guardian and Trustee being the same person?

Post by tnr » Fri Jul 13, 2018 6:53 pm

We were advised by our lawyer not to make them the same person. I guess if you totally trust the person who is the guardian, then it would be ok. In our case, my wife's sister agreed to be guardian and my brother agreed to be trustee. In the remote case that the guardian/trustee is needed, all I expect my brother to do is to use his reasonable judgement that our estate is being used wisely. I do not expect him to share any financial vision we have. To be honest, it is not something we have discussed at length with either my sister-in-law nor my brother.

Posts: 751
Joined: Thu May 08, 2014 12:33 pm

Re: Guardian and Trustee being the same person?

Post by anil686 » Fri Jul 13, 2018 8:13 pm

We were advised by our lawyer to keep them separate as well. Not only for a check and balance, but it takes work too in addition to managing the investments, taxes, reporting of the estate. Add this in to the work of raising children especially if the guardian has their own children too and it was explained that our lawyer has seen it become too much. Not everybody understands/likes investing, making decisions, or does the 3 fund portfolio. So by breaking it up, a trustee can focus on just that part and communicate with the guardian. Obviously there is a built in check and balance as well but it can be more than that. At least when I heard it, it made sense to separate them and so we did...

Posts: 1749
Joined: Sun Jan 01, 2012 11:40 pm

Re: Guardian and Trustee being the same person?

Post by J295 » Fri Jul 13, 2018 8:40 pm

No longer pertinent as our children are adults, but back in the day our named guardian was separate from Trustee. I am a big believer in corporate trustees.

You say you don’t have sufficient resources, but have you considered the death value of any life insurance you may have? I’m also a big believer in term life insurance, and if you haven’t strongly consider term you may wish to do so now, both for the benefit of the surviving spouse and child. In our case, the amount of term death benefits was material

Posts: 6423
Joined: Tue Feb 08, 2011 6:13 pm

Re: Guardian and Trustee being the same person?

Post by delamer » Fri Jul 13, 2018 9:17 pm

I am not sure what you mean by “raised correctly” but the person who is best equipped emotionally to raise your child may not be the one who is best equipped to make money & investment decisions.

We had different prople for the two roles. Fortunately, neither on had to take on the job.

Post Reply