A Framework for Choosing a Conservator/Trustee for Your Minor Child(ren)

The most important planning decision you will make as a parent is choosing a legal guardian for your minor child.

Legal guardianship has two aspects to it: person and property.

• The guardian of the person is responsible for the child’s day-to-day care, shelter, medical needs, educational needs, etc.

• The  guardian of property manages the inheritance of the minor child, including authorizing use of the funds for the child’s health, education, maintenance, and support.

When parents designate a guardian for their children, they can choose whether to have the same person be guardian over both person and property or whether to give these separate roles to separate people.

To avoid confusion, the term “guardian” will be used in this blog post to refer to the guardian of the person. In an earlier blog post, we provided a framework for choosing a guardian of the person for your minor child. In this blog post, we provide a framework for choosing a guardian of property—which can be either a conservator (if you do not have a trust in place) or a trustee (if you do have a trust in place).

A conservator is only able to manage your child’s assets until they turn 18. A trustee, on the other hand, will manage your child’s inheritance for as long as you instruct them to in your trust agreement. 

There are many factors to consider when choosing whom to appoint as conservator or trustee for your child, and every family is unique. Below are some things to consider when weighing your options.

1. Relationships

If the conservator/trustee is not also also going to be the guardian of your child, you will want to choose someone who will be able to work collaboratively with the guardian in the best interest of your child. If you have a trust that provides for financial oversight beyond age 18, however, eventually your trustee will be communicating directly with your adult child about financial affairs, so it is helpful to choose someone who is willing to have a relationship with your child as they grow.

2. Good judgment and integrity

Your conservator/trustee will be required to decide how to manage and invest funds, when professionals should be enlisted to assist with this process, and which professionals to choose. They will also need to keep an eye on the larger financial picture, maintain a budget, and decide whether to authorize discretionary expenditures.

As your child grows and potentially makes demands regarding the funds being managed for them, the conservator/trustee will need to use good judgment to determine whether funds requested should be advanced. In addition, if your child or young adult runs into trouble, it will be up to the conservator/trustee to try to protect the child’s assets from waste, fraud, and abuse. Trusts that provide for periodic or staged distributions to young people can include “spendthrift” and substance abuse provisions, allowing trustees to delay distributions if a beneficiary is irresponsible with money or is suffering from a substance abuse disorder. These situations call for diligent oversight and excellent judgment.

3. Financial acumen

Choose a conservator/trustee who has solid financial literacy and a history of making sound financial decisions for themselves. If you create a trust, you will want to choose someone who will dutifully abide by the trust terms, seek professional advice as needed, and maximize the funds available for your child’s care. Wise stewardship will include getting the most return from selling real estate in your trust, opening or funding education accounts, paying taxes, and making strategic decisions about the timing of distributions from inherited IRAs.  

How can you be sure that a potential conservator/trustee is the right choice, or that their values around money are similar to yours?

One word: communication.

First, it is crucial that you talk with your potential trustee to gauge their willingness  to accept this responsibility and their comfort level with the role.

Second, if your potential trustee is willing to serve, you will also want to share with them your values around money and your hopes for your children’s financial futures. This is because trustees will exercise a lot of discretion over what constitutes “health, education, maintenance and support” for your child, and it is helpful to understand how you would exercise that discretion as the parent.

Finally, I also suggest including a personal note for the trustees in your portfolio, putting down on paper the same values and goals you shared with them in conversation. These writings may be helpful to remind them about how you want them to exercise their discretion—and can be shared with your child when appropriate.

Remember: You don’t have to do this alone!

Treetown Law is here to help you navigate this incredibly important process. Contact us to ensure you have these critical plans in place for your children.