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I am in the process of drafting a will for my estate and would like to designate friends of mine as potential guardians for my children in the event of my death.

The concern I have is that my friends have a child whom has special needs and is likely to require expensive special needs. As my estate would benefit from a substantial payout from life insurance in the event of my death, I don't want that additional money to become a burden for the future guardians.

To clarify the situation, they have difficulty affording health insurance regularly and their son has significant heart issues. Their son is 2 years old and has had 2 open heart surgeries thus far. They are able to have certain bills forgiven via charity care and other avenues which consider their assets in making a determination.

If I indicate in my will that the estate is to be placed into either a trust or pot trust and designate the potential guardians as the trustees, would that create a sufficient divide between the guardians' assets and my children's for the purposes of determining financial status when a hospital or other entity attempts to determine applicability for charity care or other debt forgiveness?

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A trust is commonly used to handle assets of minor children and is a good idea no matter what the circumstances. The trustees and the guardians do not have to be the same people and it can be a good idea if even if the guardians are the trustees that there are additional trustee(s) as a probity check.

Notwithstanding, your child’s assets are not the guardians assets and vice-versa even if there is no trust.

I STRONGLY suggest you consult a lawyer. Wills only cost a couple of hundred bucks and are the cheapest insurance you will ever buy. A lawyer can make sure that your will is legal and can include contingencies that you haven’t considered like: you have more children, the guardians pre-decease you, the terms of the trust deed, when the child(ren) get access to the trust, what if the nominated guardians decide they don’t want the job etc.

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