Guardians and Custodians for Children

Planning for the care of your children may be at the center of your mindset during the COVID-19 pandemic. Who will care for your minor children if you become unavailable? This article explains the concepts of a guardian and a custodian.

Nominating Guardians

For a parent with minor children, the most important issue in the estate plan is usually naming the person who will act as guardian for a person’s children. A will maybe utilized to nominate a guardian. In New Jersey, a minor is an unmarried person under 18 years of age. Guardianship gives legal custody of the minor child and/or the minor’s assets to the appointed guardian.

Selecting a Guardian

Although, a parent may appoint a guardian of the parent’s minor children in the parent’s will, the court may inquire into the custody of the minor and effectuate a guardianship order in the best interest of the minor. While a parent may want to appoint someone other than a child’s other parent as guardian in his will, that appointment will not be effective unless the surviving parent timely consents in writing.

Guardian of Person or Property

If a person dies with minor children and the surviving parent has predeceased or is otherwise unable to care for the child, a guardian of the person of a minor child is necessary.  A guardian of the estate of a minor child is useful if the minor child receives funds outright. For example, the minor could receive funds via a will, from sources besides a parent, and by a beneficiary designation (i.e. joint bank account, life insurance, etc..).

A testator can select different guardians for a minor’s person and property. For example, a parent may want one person to have legal custody of a minor child and another person to manage finances of the minor child.

Understanding Custodians

If a person does not want to create a guardianship for his minor children, but still wants to protect assets that may pass to his minor children, a person may nominate a custodian under the New Jersey Uniform Transfers to Minors Act.

A will may nominate a custodian to hold the minor’s property. If the will fails to nominate a custodian, the personal representative may designate a custodian. Custodial property includes real property, tangible personal property, investments, and life insurance policies. A custodial property will only be created once a person effectuates an irrevocable transfer of the property to the nominated custodian. A custodianship can be conditioned on the occurrence of a future event such as a parent’s death. A custodian is generally held to the prudent person standard in managing custodial property. The custodianship terminates when the minor reaches age 18 or 21 (depends on the type of property).

A discussion with the proposed guardian or custodian is necessary to ensure that this person will accept the role given to him. Age, location, and life expectancy are important considerations in choosing a guardian or custodian. A candid discussion with the party will ensure that this person will be a good fit for the assigned role.

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