Two-thirds of parents are failing at this vital safety measure for their children

By Beth Pinsker

Here's why most parents balk at this legal task

This question can keep you up at night if you are a parent: Who will take care of your kids if something happens to you?

There's a lot going on when you first have a baby, so perhaps new parents can be forgiven for not having everything together right away. Some can't even come up with a name in the first few days. But a few years later - even 18 years later - two-thirds of parents are still missing a vital protection for their children: Naming a guardian in case of emergency.

A new LegalShield study found that 65% of parents with children under 18 had not taken this key step, with 19% stalled because they couldn't decide whom to name and 18% simply procrastinating. A full third of parents said they had confusion about the process - either not knowing how to do it or that it had to be done at all.

What should be in place for all minor children is a formal standby guardian designation in a will that is properly signed, witnessed and notarized. It's best if parents have a discussion with the person they're naming, so that everyone's on the same page and the prospective guardians are willing and able to step up if the need arises.

Many people also pair the guardian designation in the will with some sort of financial arrangement, because minor children cannot directly inherit assets. In a will, this is typically set up as what's called a testamentary trust, which is a trust that springs out of a will. The parents then need to name a trustee, who could be the same person as the guardian or somebody different.

"This is something that requires thought," said John Saltarelli, an attorney based in Texas who works with LegalShield. "Your children need to be taken care of."

The guardian part of will-making is not an afterthought - it's a key part of the intake process for any estate-planning process as soon as you answer "yes" to the question of whether you have kids.

When Saltarelli meets new clients, he usually asks three questions outright:

-- Who would you like to designate as guardian?

-- Who do you want to be trustee?

-- How far out do you want to extend the trust - to age 18, 21, 25 or beyond?

He can't move forward without the answers. "So it's usually a matter of clients going off to discuss," he said. "Unfortunately, a lot of time, it might end there for a while. We'll follow up a couple of times, and then it's up to them. All we can do is advise and educate them."

If you don't know who to designate, the first thing to think about is who your state would pick if you don't decide. If there's an emergency and a minor's legal parents are incapacitated or killed, most rules default to direct blood relationships - grandparents, aunts and uncles, and so forth down the line. The court system would have to step in and officially designate the guardian, checking criminal backgrounds first. If nobody comes forward, child protective services would step in.

If grandparents are not first on your list of people you'd want to take care of your kids, or if you can foresee two sides of the family fighting over custody, then that's your motivation for making a pre-emptive decision. Salterelli has seen cases where competing grandmothers both want to be guardians and a custody battle ensues.

Some people might prefer one adult sibling be the designated guardian over another. Some might bypass family altogether and ask family friends to be guardians. A court would never automatically select these people above family.

Not-so-shortcuts

Setting up a will is an adult financial task that people have struggled with for generations. LegalShield's study is actually rosier than most, in finding that 96% said that a will was important and that 35% had set one up to name a guardian for children; that's well above the typical 30% in most national surveys who say they have wills.

LegalShield also found that 36% of parents had made sure that their young adult children over 18 had a power of attorney filled out. A recent Trust & Will survey found that only 16% of adults had a valid power of attorney set up.

One way to bypass a will and still protect children is to name a standby guardian in a separate document. Rules for these vary by state. In Texas, clients can sign and notarize a simple guardianship document, Saltarelli said, and it would be much the same as signing a healthcare proxy, HIPAA authorization or power of attorney. These are all simple permission-slip-style forms that name a person as an agent to act on behalf of the signer.

It sounds simple, but there are other steps once you sign and notarize the paper, Saltarelli noted. The standby guardian would not be automatic. In the event of the parents' death, the courts would still need to approve the guardian. The paperwork also would not provide for any of the financial arrangements, so there would still be issues that could only be resolved with a trust or a financial conservatorship directed by the court.

"There are some formalities to it," said Saltarelli. "Parents will do something like this if they are going on trip and they start to think, 'What happens if something happens while we're away?'"

In Saltarelli's 38 years of experience, however, most people stick to naming a guardian as part of estate planning. And when they balk, it simply doesn't get done. They usually come back around in their 60s or 70s, when they are thinking about their plans. By then, their kids are all grown up - and when the estate attorney (or the software prompts, if they are using an online service) asks about the household, the ones who need care are pets. So, more often now, it's pets who get a guardian and a supplemental trust to provide funds for their ongoing care.

"That is what they are thinking about now," Saltarelli said. And when they start exploring pet trusts and the arrangements necessary, they see what they missed when their children were young.

"I don't know if people understand what happens to their kids if they don't have a will. All states have laws for this, and it might now be something you agree with," Saltarelli said. "That's why you need to get all this done."

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