Making financial provision for a guardian to my children

I am married and we have two young girls. We have a basic will and, years ago, I asked my sibling to become guardian to our daughters in the event of our death.

It is now more obvious to me that she would not be the best guardian and my husband’s siblings would be a more suitable option. However, I feel they would struggle financially raising our daughters.

I want to write an amendment to our will, expressing our new wishes for guardianship. Is it possible to include a provision for some financial support to be released from our estate to be used for the rearing of our daughters, to ease the financial burden for the new guardian? We will not be leaving a large estate so I do also want to ensure part of it is protected for the daughters.

Ms C. G., Dublin

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Every so often, an issue comes around and it is so clearly a matter of concern for so many people that you wonder why it hasn’t emerged before. And so it is here.

Countless families with young children make provision in their wills for someone to care for those children in the event of a worst-case scenario – where both parents die. And it is not uncommon as circumstances change, children get older and relationships become clearer that such arrangements might have to be amended.

Clearly, where married parents are alive, they are the guardians of these children – even in the event of subsequent divorce. In the case of unmarried parents, the mother is guardian and the father can apply to the courts to be named as a guardian.

But what happens if neither is around? Exactly what you did. You appoint someone to act as guardian in your stead until the child is 18 (or up to 22 if in full-time education).

And it is important that they do so. In the absence of a nominated guardian, the courts may appoint someone who would not have been your choice in the event the children become orphaned.

If, as in the current situation, you have come to the conclusion that your husband’s siblings might be better suited to act as guardians to your young children, there is nothing to stop you replacing your sibling with one or more of your husband’s. You simply have to file a codicil to your will or, perhaps more cleanly, draw up a new will. You don’t need to change anything else unless you want to, just update for the change of guardian.

Of course, it makes sense to let those people know of your intentions, not least to avoid any nasty surprises – such as, for instance, them being aware of developing health problems that might preclude them feeling able to fill the role.

But what about finances? Again, this is very common. A person, or family, who suddenly find themselves coping for one or more children that they haven’t budgeted for can find it a bit of a squeeze financially.

What most lawyers will advise is that, in your will, you set up a trust to provide for the care of your children.

It is up to you what goes into this trust. Generally, it will include the assets that are intended for the children in the event of your death but it is perfectly possible to customise such an arrangement any way you please – for instance to exclude the family home, or whatever.

Clearly, if you are worried about the financial capacity of the potential guardians to look after your girls in the way you would choose, it makes sense to ensure that they have access to the resources to do so.

Normally the trust has two trustees who, in the event of your death, manage the assets and any call on them. These can be the guardian and the executor of the estate or it can be anyone else, and not necessarily connected otherwise with your will or family members.

If you are going down this route, it would make sense to get proper legal advice on the wording and provisions of any will allow for the new guardians and the trust.

You should also know that there are welfare payments available to orphans, via their guardians. A guardian can apply for a contributory guardian’s payment on the basis either of their own PRSI record, or that of the child’s parents. The weekly payment of €181 is meant to be used for the care of the child – though clearly that’s a broad enough church.

The payment is per child, not per family, so in a case like yours, that figure would be doubled.

If not enough PRSI stamps are paid, the orphan can apply for a means-tested non-contributory guardian’s payment, which is assessed against their own means and paid to the guardian. It is again payable up to a maximum of €181.

A guardian cannot apply for both the guardian and the foster care allowance payment from welfare.

And one final thing to note: the guardian’s payment is taxable like many welfare payments. However, it is considered the income of the child and therefore it would be assessable for tax only against any other income your daughters may have, not against that of the guardian.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice