Q. I’m having trouble deciding on who to name as guardians for my kids. I know my sister loves them but she’s bad about money. Am I better off with someone who is more responsible with money?
— Mom

A. Naming a guardian for your children is one of the hardest, and most important decisions you will ever make.

In your case, you don’t have to choose between money savvy and love for your kids.

You are not limited to appointing only one guardian of the person and estate of a minor child, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

Moreover, she said, you may appoint one individual as a guardian of the person (meaning he or she will care for your child), and name another individual as a guardian of the estate(meaning he or she will care for the assets of your child).

In most situations involving minors, Romania said, assets are placed into trust until the minor reaches a particular age or ages at which distributions are mandated.

For example, the trust can provide that one-third of the balance will be distributed when the beneficiary reaches age 25, one-half of the remaining balance will be distributed when the beneficiary reaches age 30 and the trust will be terminated and the remainder distributed when the beneficiary reaches age 35.

A named trustee will invest and distribute the funds in his or her discretion for the support, education, health and welfare of the minor, Romania said.

“The named trustee may be the same person or a different person than the guardian who is caring for your child,” she said. “Having two different individuals named as trustee and guardian provides a check and balance better ensuring that neither individual breaches his or her fiduciary duties.”

In your situation, it allows you to choose the person who is best suited to care for your child to be named as guardian, while a person more suited to handle financial issues is named as trustee and can invest and distribute money or pay third parties on behalf of your child as necessary, Romania said.

If the trustee and guardian is not the same person, you should consider naming people who will be able to work together so they can communicate about the child’s needs and the availability and limits of the trust fund. This way, the guardian won’t be spending beyond the trust’s ability to reimburse.

“Additionally, you may prepare a letter to your trustee and guardian, indicating your intent with respect to the distribution of the funds on your child’s behalf, for example whether you intend such funds to be primarily used to the extent possible for higher education,” Romania said. “In that way they are both aware of your intent with regard to the use of the funds.”

Learn more about other important estate planning documents here.

Email your questions to ask@njmoneyhelp.com.

Karin Price Mueller writes the Bamboozled column for The Star-Ledger and she’s the founder of NJMoneyHelp.com. Click here to sign up for the NJMoneyHelp.com weekly e-newsletter. Like NJMoneyHelp.com on Facebook and follow it on Twitter

More From New Jersey 101.5 FM