A lot of families find it helpful to hear what other families have done in their estate planning, and they get ideas from what others have done. It’s most helpful, I think, when you know something about the family itself, so let’s talk about Harry Potter. (We have previously discussed Batman here)
Who will care for the orphan?
Harry was famously orphaned as an infant when his parents were murdered by Voldemort. At the time, though, it was believed that Sirius Black had either killed them or was involved in their killing. Because Harry’s parents, James and Lily, had named Sirius as Harry’s godfather, under wizarding law that would mean he was the designated guardian for Harry in the event something happened to the parents, which of course, it did. But because it was believed that Sirius was involved in the killing, Dumbledore stepped in and took Harry to be raised by his relatives, the Dursleys, which in hindsight was a very bad deal for Harry.
[If you’re interested in more case studies and discussion about how the wizarding world handles it orphans, like Tom Riddle and Teddy Lupin, you might want to check out this chatboard. ]
In the muggle world, if a family had named a designated guardian for the child who was determined to have killed the parents, a court, much like Dumbledore, would likely determine that person not to be a suitable guardian, and refuse to appoint them, even though the parent’s had named that person. A judge will always look to see if the named person is otherwise suitable at the time the appointment comes along, thus protecting the child much as Dumbledore attempted to do.
While James and Lily could not have predicted that Sirius would be alleged to have been involved in their murder, they could have predicted that for a variety of reasons Sirius might not be able to serve as guardian when the time arose, and their best course of action would have been to name backup guardians. With an apparently large number of close friends in the wizarding world, naming a backup to Sirius would have allowed Dumbledore to consider other people as guardian before turning to the Dursley’s, and Harry might have been spared the closet and abuse he endured as a young child.
How to handle the money
Lily and James also would have needed to create a plan for the property and money they had, and how that would be left to Harry. Kids who inherit from their parents while still minors are never handed the keys to the bank account, but they generally do get full access and control of the property and money as soon as they turn either 18 or 21, depending on the state. In the wizarding world the age is 17, so Harry would have gotten full control of everything in the Gringott’s Vault as soon as he turned 17, which is a scary thought for most parents. Butter Beer for all!
The better way for the Potters to have done this would have been to appoint a trusted person – and some back up people since Sirius would likely have been their first choice – to act as trustee for the property until Harry reached an age that they felt he would be able to appropriately handle the money. Until that time, the trustee would make decisions about spending for Harry’s benefit. The actual age chosen by each set of parents depends on what they know about their child, their own philosophy of money and adulthood, and the amount of money likely to be available. The scenes where Harry heads to the Gringott’s vault at the beginning of each school year and grabs a bunch of money, with no supervision and no thought about budgeting or accounting, should make every parent cringe. Setting up your estate plan to avoid that is easily accomplished.
If you’re ready to avoid your own estate planning fiasco, call or email us for a quick consultation on how we might be able to help. firstname.lastname@example.org or 833-RED-BOOT (833-733-2668)