As a working parent, nothing makes it worth braving those early mornings more than knowing that your children will always be taken care of. So you invest for your children\u2019s education, list them as beneficiaries to your life cover and employer fund benefits and, finally, put a will in place to make sure your wishes will be honoured.<\/p>\n
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But did you know that a minor child cannot manage their inheritance on their own without the assistance of a legal guardian? Did you also know that in the absence of a surviving parent or legal guardian their inheritance must be held in the Guardian\u2019s Fund that is controlled by the Department of Justice?<\/p>\n
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Danie van Niekerk explains that South African law prohibits children under the age of 18 from entering into contracts without the consent of their legal guardian. So if you want to leave an inheritance for your children \u2013 whether immovable property, or the proceeds of policies or investments \u2013 and especially if you are a single parent, you should rather set up a trust for their benefit until they reach the age of maturity.<\/p>\n
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Where do minor children\u2019s inheritances go?<\/strong><\/p>\n Parents can bequeath their personal assets and life cover proceeds to a testamentary trust<\/em><\/strong>. This is a trust that is formed when parents pass away, if they included such an instruction in their last will and testament. If a parent\u2019s will has no testamentary trust clause, all assets left to minor children are transferred to the Guardian’s Fund<\/em><\/strong>, which is administered by the Master of the High Court. Proceeds from employment benefits \u2013 such as pension fund, provident fund and group life benefits \u2013 are paid into beneficiary funds<\/em><\/strong>.<\/p>\n <\/p>\n Danie of Indwe BlueStar says it is advisable that parents establish a testamentary trust in their last will and testament to avoid complications that may arise after their passing. For instance, whoever becomes your child\u2019s guardian can get access to their inheritance and may use the funds for other purposes not intended for your child\u2019s upbringing and maintenance.<\/p>\n <\/p>\n \u201cThe advantage of a testamentary trust is that you can have one person as a guardian for your children and another as a trustee for your estate. Separating these responsibilities will help avoid possible abuse of the money you\u2019ve left for your children, by their guardian. You can nominate any competent person you trust as a trustee, or a professional trustee such as a trust company. The appointment of the trustee will ultimately be made by the Master of the High Court, who will ensure a proper process is followed<\/p>\n","protected":false},"excerpt":{"rendered":" As a working parent, nothing makes it worth braving those early mornings more than knowing that your children will always be taken care of. So you invest for your children\u2019s education, list them as beneficiaries to your life cover and employer fund benefits and, finally, put a will in place to make sure your wishes […]<\/p>\n","protected":false},"author":1,"featured_media":637,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-635","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general"],"yoast_head":"\n