What if my child's appointed guardian can't handle money?

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Question:

I'm a single mom getting ready to make a will. I plan to leave everything to my five-year-old daughter and name my sister to raise her. My only concern is that my sister might not be able to manage the money and property that my daughter would inherit. Any ideas?

Answer:

You're wise to consider this as part of your estate planning. Money can slip awfully quickly through the fingers of someone not accustomed to having it. A common way for parents to deal with this issue is to name one person to be their children's personal guardian and a different person to look after financial matters.

Perhaps you have a close friend or relative who cares about your daughter and would be better at dealing with the economic aspects of bringing her up. Provided that your sister and this other person agree to this plan, you can name your sister as personal guardian while naming your financially savvy friend as custodian or trustee to manage your child's inheritance. For more information on minors and money, see Leaving an Inheritance for Children. To see solutions to other problems you may have choosing a guardian, see Naming a Guardian for Your Child: Problems and Solutions

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