Addressing the inevitability of our mortality isn't easy, but protecting your loved ones after you're gone is a necessity, not a choice. A professionally drawn will is crucial for safeguarding your family's future. Here's how to ensure your children's inheritances stay out of the Guardian's Fund.
Why You Need a Will
Without a will, you die "intestate," letting the law decide for you. You lose the right to choose an executor, specify estate distribution, and nominate a guardian for your children. Most importantly, you lose control over protecting your children's inheritances.
Understanding the Guardian's Fund
The Guardian's Fund exists to protect money, including inheritances, for minors and others who can't manage their finances. It's managed by the Master of the High Court and audited annually, providing a secure environment for vulnerable individuals. Money is invested and earns interest, but there are drawbacks.
Drawbacks of the Guardian's Fund
Media reports of hacking, theft, fraud, and corruption within the Fund raise concerns. Administrative hurdles slow down access to funds for guardians, and the fixed interest rate offered is below inflation. When children turn eighteen, accessing their money involves bureaucracy.
The Best Protection
To protect your children's inheritances, take these steps:
The most recommended protection mechanism is a trust, either an existing one or a "testamentary trust" created upon your death. Trusts ensure your wishes are followed, and they're a safer option than leaving the guardians to manage the funds. Remember, dealing with trusts requires professional advice due to legal, financial, and tax complexities.
Conclusion
To ensure your children's inheritances are secure and don't end up in the Guardian's Fund, consult an attorney to draft or update your will. It's a vital step in protecting your family's future.
