Sister wants him to care for her kids

Question: My wife and I have been asked to act as guardians to my sister's two young daughters should anything happens to her. She lives in my home country, India, and is seriously unwell and unable to work. I want to get the financial elements of caring for my nieces in place as soon as possible. What are the key actions we need to take?

Answer: The situation you, your wife and your sister find yourselves in is a difficult one which needs careful planning.

The main priority for all of you will be safeguarding the future well-being of your two young nieces, whether that is assisting your sister in caring for her family in your home country or bringing the children to live with you in the UAE.

On a basic level, becoming your nieces' legal guardians means you will be responsible for all their daily needs: providing food, clothing, shelter and other necessities, and on a more complex level it may require you to manage their finances until they are of an age when they are legally deemed old enough to do so themselves. There are two ways in which you can become their legal guardian. If this role needs to be taken on while your sister is still alive then there are number of legal regulations you will have to follow under Indian laws. To do this, it would be advisable to speak to a lawyer to assist you on this matter.

If guardianship is only to take effect on the death of your sister then she must name you and your wife as guardians in her will, which should also set out directions for the appointment of executors to deal with her estate and instructions for the payment of debts and the transfer of assets.

Depending on your sister's wishes you may be asked to take on the management of some of her assets for the financial good of your nieces.

Your sister may do this by setting up a trust fund where the ownership of her assets, including real estate, shares and cash are legally transferred to you.

For example, your sister may have some real estate that she wants to pass on to her daughters — as trustee you become the legal owner of the property with a legal obligation to put the interest of your nieces above your own when managing it.

As well as safeguarding the future financial wellbeing of your nieces, you and your wife will need to assess your own personal finances to ensure that you are prepared to take on the financial commitment of caring for the girls.

Seeking the assistance of an independent financial adviser will help you plan for this as you will need to adjust your budget from the size of your home right down to cost of your weekly grocery shopping.

Of course, one of the most important parts of your nieces' future is their education and one action you may want to consider is setting up a specific investment fund to pay for this. Each niece will need an individual fund, which are usually fixed-term policies that can span from any age, up to the age of 17. At the end of the term the policy provides you with the flexibility to either directly fund the fees, or to take a lump sum, which you can use however you wish to support your nieces.

The writer is a solicitor and senior estate planning consultant with Nexus Insurance Brokers. Opinion expressed are his own and do not reflect that of Gulf News. If you have any questions, please email to advice@gulfnews.com.