It does not always get the attention in financial and estate planning but it can be extremely important in the event of tragic circumstances. Those circumstances occur when both parents die in a common accident, or one parent dies and the other dies at a later time or a custodial parent dies and the other parent is no longer present or has avoided responsibility. Be forewarned that an absent or wayward parent could suddenly show up in this situation and claim parental rights.
Even if a young family does not have much wealth and would normally not think of the need for a will, the use of such can provide a resolution in these events. The reason for this is that minor children who have lost their parents must be placed with a guardian. This is done by the court often in conjunction with a social service agency that may have temporary custody of a child. You may assume a close relative will naturally step up to help but they still have to go thru the legal process.
You can make this trauma calmer, faster and less expensive. In such a terrible tragedy affecting minor children it is very helpful if the parents had previously designated someone to take their place.
In this type of planning, the parents would have explored the options if such a tragedy were to occur and chose people willing and able to be the guardian for their children. Obviously, this is a serious deliberation and should be discussed with the persons you would like to assume this role. If appropriate, you can discuss this matter with your children. Keep in mind that in some courts and jurisdictions, children age 14 and older may be allowed to express their wishes in the proceedings and their opinion could alter the outcome.
There are two types of guardians. One is the “guardian of the person”. This may be a relative or close friend whom you trust to become the parent of your child. The other is the “guardian of the property” who is trusted to manage the finances and any assets that may be available to the child. One person can be both but it may be more practical to separate the duties. For instance, the person caring daily for the child may not have the skills or time for financial management. Also, it is important to name alternates or backups in case your first choice may not be able to perform this obligation at the appointed time. These functions can also be accomplished with the use of trusts and trustees. To the extent that there are financial resources available, such as government benefits, life insurance,etc., professional help can be retained. In the event you do not feel comfortable with anyone and do not have options, it may actually be better to let the courts decide these issues.
You should definitely use an attorney who specializes in this area for some of the planning and certainly the legal documents. However, if you cannot get to an attorney or afford one, perhaps a simple letter addressed to the people you have chosen as guardians will work. You should probably have your signature notarized. That person can then present your letter to the court. Very strange things can happen after the death of someone. Under such tragic circumstances, anything you can do to help your child in a very difficult transition would be most useful.