How Does Guardianship Play into Divorce and Blended Families?

There are estate planning situations that simply scream for careful thought and preparation. Divorce is obvious because it would typically be a problem if a former spouse has control of your assets and absolute control over the raising of the children. Blended families are another common situation. Choices regarding separate and jointly held property have to be made as well as potential issues that might arise regarding minor children and will arise regarding eventual inheritance. (e.g. Does grandma’s house go to the other spouse’s children as well as your children?) Lastly, guardianship is a powerful tool but also a potential point of contention. Which side of the family would be responsible in the event someone has to raise and provide for the children? That’s often a very difficult question to answer.

Divorce

Estate planning after a divorce is often overlooked.

Let’s start with estate planning following a divorce action. If something happens to you, the single parent, who will “get” to raise the children? If it’s your former spouse, there might be some issues. Wouldn’t it be amazing if you could designate a guardian who could watch over the kids…and not just leave their wellbeing in the hands of your ex? Well, there are some issues. Many states have very restrictive “third-party” visitation rights laws. In all cases, the grandparents, for instance, have to petition the court to get the right to even visit their grandchildren if the remaining parent objects…

One method for incentivizing a former son or daughter-in-law is to create a financial guardianship or conservatorship over the children’s assets. The grandparents are named the successor trustees or guardians, and they have complete control over the deceased parent’s estate. As a result, the grandparents now control the “purse strings,” and it’s only prudent for the remaining parent to play nice and allow visitation and a degree of control over the upbringing of the children… or risk losing any access to the assets.

Blended Families

Lots of kids, lots of problems, lots of drama...

A blended family is a non-nuclear family where one or more spouse has had a prior relationship and children that were born prior to the present relationship. The classic example is the “Brady Bunch” or something similar. The issues arise from the character of property that comes to the marital relationship. Generally, all property acquired during the course of a marriage is considered joint or “community” property unless it came from a gift or inheritance and has not had its character changed from being separate property. Similarly, separate property may belong to one or the other spouse because it existed prior to the current marriage. (e.g. Separate property is property that pre-existed the marriage.) This property may be included in the joint or community property if the title or character of the property is changed to jointly held or community property – either accidentally or deliberately. (e.g. If a spouse retitles her house from her name only to both her and her husband’s names, it becomes joint or community property because she acted the change its character.) In any case, appointing agents, successor trustees, personal representatives or successors of any kind can be a serious question. In the same vein, determining who gets what property by inheritance can be a question that has the potential to tear a family apart.

For example: Imagine Dora and Hank have married after prior relationships. Dora has three children and Hank has two. Dora’s separate property includes a home and investment accounts derived from her previous divorce. Hank has a successful business. Together they purchase several rental properties and live in Dora’s home. Who will be in charge should something happen to either Dora or Hank or both? Will all five children receive equal shares in the total property holdings or will Dora’s children get half and Hank’s children the other half. What about the marital residence that was Dora’s separate property? What about the business that was Hank’s separate property, but which both worked to build? These issues are critical to both Dora and Hank and of great concern to their children also.

Guardianship

Guardians are responsible for the care and nurture of minors.

Lastly, the issue of guardianship may be helpful or problematic in the above scenarios. A guardianship is a court-ordered arrangement where an individual is appointed to serve as a responsible agent with the authority to make decisions for a minor child or a disabled adult. A conservatorship is a guardianship over assets, businesses and accounts… It’s essentially a money guardianship.

In some jurisdictions a parent can nominate a temporary agent called a “guardianship without court intervention.” This is not typical and often requires the consent of the minor. In all jurisdictions, a parent may delegate a guardian or conservator in their notarized estate planning documents like a durable power of attorney, last will and testament or a trust. This delegation must be confirmed or ordered by a court before the guardianship becomes effective. (It is important to note that the court will generally follow the delegation but is not legally bound to do so.) Guardianship is very powerful and is usually closely monitored by the court. Any improper dealings may result in criminal and civil penalties which can enhance the protections to the beneficiaries of the estate.

In conclusion, some situations may benefit from separate guardians being nominated for protection of the children or heirs of an estate or protection of their assets. In other cases, choosing to have separate guardians may be preferable because not all couples share the same children. Guardianship and Conservatorship can also be the solution to concerns regarding mishandling of estate assets because guardians are required to file an annual accounting with the court…and the beneficiaries. In all cases, consulting with a licensed legal professional is highly encouraged.

Curry Andrews, Attorney