One of the main motivating factors for people to get a professional Last Will and Testament put into place, is because they want to ensure their children are provided for if they pass away. This is true for new parents or people with young children who are getting their affairs in order. It is especially important to speak to a professional when your children are younger than 18 years old and considered minors in the eyes of our law. There are multiple ways that minor children’s inheritance is managed and regulated and it mostly depends on whether their parents had a Will in place to make their wishes and intentions clear.
In the event that a minor child is the beneficiary in terms of intestate succession, meaning their parents did not have a Will, the laws regulate that the inheritance is paid into and managed by the Guardian’s Fund. It is a government entity which falls under the administration of the Master of the High Court. A big drawback of inheritance being paid into this fund, is that the amount that a guardian can claim to use for the child’s maintenance and upbringing, is very limited and heavily regulated. The current limit is R250 000.00 that can be used for the child’s school and university fees, clothes, medical fees, boarding and lodging and any other needs that can be fully motivated.
In most cases where there is a possibility of a minor child being a beneficiary in a Will, a provision for the creation of a Testamentary Trust will be included. This means that the minor child’s inheritance will be paid into this specially created Trust and managed by the selected Trustees for a set amount of time and for the benefit of the minor children. The original Will and the trust provisions therein serves as the Trust Deed.
There are many advantages to having a Testamentary Trust in place rather than the inheritance being placed under management of the Guardian’s Fund. It means that the person making the Will can specify certain wishes, such as who the Trustees should be, what the Trust’s funds should be used for, and what age the beneficiary must be for the full amount to be under their control. It allows for a more customised approach and to cater for any specific individual needs that may arise.
It is important to take the necessary steps to ensure your minor children are cared for if you are not there anymore. Get that peace of mind by contacting Curran Attorneys on (021) 671 9322 or email jeanne@curranattorneys.co.za to discuss how to be prepared for any estate planning scenario.
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