Review for Accountants & Financial Planners
August, 2016

Looking after young children in your Will...

Two minute scenarios...

There are a number of estate planning issues to think about when you have young children.

Scenario One... Steve and Vicki

Scenario: These clients have two young children. They need to appoint a guardian to look after them in case they die prematurely.

What's the issue? They both want Vicki's eldest sister, Libby, to look after the children, and she is happy to do so. However, they are wondering what will happen to the children's inheritance until they can manage it themselves.

Solutions: It is a matter for the Willmakers, but usually the guardian will also be appointed as trustee for the children's inheritance, until they reach the age at which they can get control. So, in this case, Libby would manage the inheritance funds on their behalf.

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Scenario Two... but, financially, how will it work?

Scenario: Steve and Vicki are concerned about the management of the inheritance.

What's the issue? Libby does not have a lot of experience in investing funds, plus Steve and Vicki are worried that looking after the children will put an extra strain on Libby and her family.

Solutions: Libby can get an Adviser to help invest the funds on behalf of the children, who can be paid from the estate money. Plus, she can use the income earned from the estate, plus capital if necessary, to pay for Steve and Vicki's children's expenses. That includes school fees and living expenses including food, clothing and travel.

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Scenario Three... at 25yo they will get control

Scenario: Steve and Vicki tell you they have stipulated in their Wills that their children must be 25yo before they get control of their inheritance.

What's the issue? A review of their Wills highlights that even though their Wills specify that the children need to be 25 yo before they get control, the Wills are only Standard Wills. Under law the children will be able to get control when they become adults i.e., at 18yo, even though the Wills specify otherwise.

Solutions: These clients should have Wills with testamentary trusts in them. That way, the condition that the children must 25 yo before they get control, must be met.

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More information for clients

Please feel free to forward this insight on Different Types of Wills to your clients. Or if they would like to discuss how we can help them please call 03 8621 9000 or email with their details and we will contact them, obligation free.

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