A child is a person under the age of 18 years. As a general rule a child does not have the same rights, possessed by an adult, to make personal decisions as to where they live, their education, medical decisions or entering into legally binding contracts.

The parent or parents of a child are the guardians of the child and have the legal power to make personal decisions regarding the child.

The parent of a child aged under 18 years may, through their Will, appoint any person (or persons) to be responsible for the long-term care, advancement and education of their minor children. This person is known as the ‘testamentary guardian’.

Usually, a testamentary guardian is appointed to act if the last surviving parent dies, thus endowing the guardian with the responsibilities of parenthood towards the relevant child. That said, while parents may appoint the same testamentary guardian, it is possible for the mother and father of the relevant child to each appoint separate guardians who then act with the surviving parent.

Does the guardian manage the inheritance for the child?

It is not the role of the testamentary guardian to manage the inheritance for the child. This is the role of the executor and trustee of the relevant estate. However, the testamentary guardian can apply to the relevant trustee for funds in relation to the maintenance, education or advancement of the child.

It is possible to appoint the guardian as the executor and trustee in addition to their guardianship role. Some Willmaker’s prefer the same person or persons having both roles, whilst others prefer different people having the roles. It is up to the Willmaker to decide what is the best approach to take having regard to their child’s circumstances. However, if you appoint different people to the roles, it is not advisable to appoint people who have a history of problems between them. If you appoint different people to the roles, you should be confident that they will all act in the best interest of your child.

The guardianship appointment will end when the child attains the age of 18 years. However, you can provide in your Will that the management of the inheritance by the trustee is to continue until the child attains a later age, such as 25 years.

Other considerations when appointing a testamentary guardian

When appointing a testamentary guardian, consider the following issues:

  • Is there likely to be a cooperative relationship between your chosen executors and trustees of your Will and the proposed testamentary guardian?
  • Where does the testamentary guardian live and where would you like your child to live?
  • What is the proposed testamentary guardian’s age and her or his fitness to act?
  • What costs might be imposed on the Testamentary Guardian?

What can I do if I can’t decide with whom my child should live?

Many Willmakers have difficulty in selecting an appropriate guardian or guardians for their child. They sometimes find it difficult to decide who should accommodate the child, as there are many factors to consider. Such concerns can be allayed by understanding that the decision as to where (and with whom) the child resides is just one of several decisions a guardian can make. For example, the child need not actually live with the guardian. The guardian can decide who is the appropriate person(s) to have the day to day care of the child. In appointing a testamentary guardian, the parent is entrusting such important decisions to the testamentary guardian.

Authored by Julia Monahan, Estate Planning Lawyer at HLB Mann Judd Sydney. This article was first published in Issue 13 of Personal Wealth Adviser.