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Nothing is closer to a parent’s heart than the safety, happiness, and well-being of their children. The thought of not being there for your child as they grow into adulthood is hard to comprehend. Being in the business of Wills & Estates, we encounter this heartbreaking situation often and it is very clear that the outcome of the child’s immediate future is heavily dependent on the planning the parents have put in place now.
First off, it goes without saying, that a Last Will & Testament should be in place. We have published many articles to this effect but still South Africans lag too far behind the curve here, with only 30% of adult South Africans having a valid Last Will & Testament in place. This simple, but important document allows you to clearly outline your wishes in terms of who inherits what and how. The how in this article is what we want to focus on.
Minor children (under the age of 18) cannot inherit assets. So, without setting up a vehicle for them to inherit, such as a Trust, their inheritance will pass to the Government Guardian’s Fund, or to their Guardians, to be the custodian of until they reach the age of 18 years. Claiming money from the Guardian’s Fund is a laborious process that one does not want to subject the Guardians, and by implication, your children, to.
This is why we have created specialised, tried and tested Trust structures with the specific goal of looking after your children’s needs.
Last Will and Testament and a Children’s Trust
A Last Will and Testament is a legal document expressing your last wishes concerning what should happen to your assets and your minor children should you and/or your spouse pass away.
A Children’s Trust, which is a Testamentary Trust, is set out in your Will and commences after you have passed away.
Let us assume that you have done the wise thing and had a Last Will and Testament drafted for you by Capital Legacy.
Guardians
In your Will you have indicated who you want to be the Guardians of your Minor Children should both of you pass away. You have done this so that your minor children are not placed in safe care with people they do not know, and you would not have approved of. It does not happen often, but sometimes it does.
One has to bear in mind that it is not a law that Guardians as nominated by you, will be the Guardians of your children in the event of you passing. Social workers will still investigate if they are fit and proper to look after your children before the Children’s Court will make it official by making it an order of the Court.
You also stipulated in your Will that you want Capital Legacy to be the Executors of your Estate (because we do it much quicker than the rest of the industry) and you have appointed us as Trustees or co-Trustees of the Children’s Trust as indicated in your Last Will and Testament.
How much and what assets you want to leave to your Minor Children (Beneficiaries) will be reflected in your Will. It also instructs the Trustees on what age your Children should inherit your money and assets. Minor Children are not allowed to own assets under South African law, hence the need for a Children’s Trust.
Because it is in a Trust, the Trustees may, for instance, sell immovable property if there is real and immediate danger of the property losing value. They may also make decisions regarding renting the property out and investing money at another reputable financial institution if they could get better interest.
Capital Legacy and Children’s Trusts:
For the last decade we have been on a pursuit to create solutions to make the loss of a loved one easier. Our Children’s Trust is a specifically designed package with pre-approved clauses that have been tried and tested to effectively look after your Children’s inheritance, should anything happen to you. Testamentary Trusts are normally quite complicated but with us, all you need to do is have a complimentary Will consultation with one of our expert Consultants. We will assist you to draft your Will and we will implement our Children’s Trust for you. You can have peace of mind knowing that your Estate will be in good hands, and we will also manage the Trust to ensure that your Children’s needs are looked after. Our Children’s Trusts are very close to our hearts, and we take care of their finances as if they were our own.
Capital Legacy goes the extra mile with “our children”. Our team involves the heirs and at the right age also help educate the heirs to become financially literate when the time comes to terminate the Trust and the balance of the Trust Capital is paid to the Beneficiaries.
We have had the pleasure of sending Beneficiaries congratulatory gifts when they got their driver’s license or purchase their first car as an example. We have financial experts constantly exploring the markets to see where they can find safe and better investment holdings for the Beneficiaries’ capital depending on the Beneficiaries needs.
At the moment, Capital Legacy is Trustee or co-Trustee to 55 active Children’s Trusts, another 29 waiting for the Letters of Authority, 8 waiting for documents from co-trustees and 80 already registered, waiting for the Estate to be wound up.
Typical Testamentary Trust Fees can range from 0,75% to 2,5% annually. Seeing that the average age of “our kids’ when Children’s Funds start providing for them is 11 years old the costs can be astronomical when they reach majority (18 years or older).
Capital Legacy’s solution to this is our Legacy Protection PlanTM which covers which covers all the legal fees, including Trust fees, when you pass away.
It makes a drastic difference to the capital amount to be paid out to your children at the age which you have specified (18 years of age or older).
Capital Legacy has 200 consultants across SA, ready to assist you with a complimentary Will consultation and in under an hour you can get your Will in order. Our consultants can come to your home, place of work, or you may opt for a virtual consultation.
Knowing that your children and their inheritance will be looked after should you pass away will certainly help a parent rest easier at night. Visit our website to connect with us today: www.capitallegacy.co.za
This post and content is sponsored, written and provided by Capital Legacy.
