4 Steps to a Smarter Will

4 Steps to a Smarter Will


Most people with children have an almost standard clause in their wills that leaves their estate or a portion of it to their kids, at least in the event of the two parents dying at the same time.

But what are the consequences if the kids are still minor (younger than 18)?

1. Who will manage the money?

Money or other assets left to a minor child in a will could be managed on their behalf by the natural guardian, or surviving parent of the child – but only if they comply with the requirements of the Master of the High Court. These include authorisation by way of a “Letter of Tutorship or Custodianship” as well as the Master’s satisfaction that the money have been secured by the guardian on behalf of the child.

However, the following problems could arise:

  • The Master of the Court could refuse to grant the natural guardian or surviving parent the authority to manage the money on behalf of the child if they are concerned that the money will not be managed wisely.
  • The deceased parent might have had sole custody of the child after, for example, a divorce. In such a case the surviving parent does not automatically become the guardian of the child and has to go to court to get custody or guardianship of the child – and even then the Master of the High Court might refuse to grant the surviving parent the authority to manage the money left to the child on his or her behalf.
  • Both parents die at the same time and no other person has been appointed guardian of the child in the will.

If the money cannot go to the guardian, it will go to the Guardian’s Fund where it will be managed on behalf of the child by the government or Master of the Court.

Related: Stop Encouraging Ungrateful Brats

2. Insurance policy beneficiaries

Sometimes the parent makes the child the beneficiary of their insurance policies, which leaves the money to the child outside of the will. However, in such a case the insurance company will request a copy of the will to see who is going to manage the money on behalf of the child – as they are legally obliged to.

If there is no guardian appointed in the will or if the natural guardian cannot be identified, they might also choose to rather pay the money to the Guardian’s Fund.

3. Safeguard the money that you leave

Apart from the legal issues related to leaving money to a minor child, there are also other behavioural issues that could affect your inheritance to your child: what if the surviving parent is not good with managing money and the child’s inheritance gets squandered?

What if the surviving parent subsequently gets into a relationship with a person that you would rather not manage your child’s money?

Related: What to Do About that Inheritance

4. Specify the age at which they receive the money

A note of warning – you might have left your estate to your children, but on condition that they can only get their money when they achieve majority. However, your intention might have been for them to get the money when they turn 21, but as the age of majority has changed to 18, this could mean that your children are now inheriting the money at the age of 18.

The answer to how best to provide for the prudent management of your child’s inheritance will depend on your circumstances and family relations.

An option would be to set up a testamentary trust in your will with trustees that can do the job on your behalf. But if the management of a testamentary trust might be too costly to consider in your circumstances, there are a number of insurance companies offering umbrella type trusts that could be a cost-effective option.

Therefore, make sure your will is up to date and that you have appointed suitable guardians in your will to take custody of your children in the event of both parents dying at the same time. And of course, consult with a certified financial planner to check how you can best plan for any of the circumstances described above.

Hesta van der Westhuizen
Hesta van der Westhuizen CFP is a Certified Financial Planner at Consolidated Financial Planning and has a BCom-degree and Advanced Post Graduate diploma in Financial Planning Law. She is also Chairperson of the Financial Planning Institute’s Risk committee. For more information please visit: www.consolidated.co.za