Drafting your own will? Ensure your minor children are correctly covered.

Kirk Ridgway with acknowledgement and thanks to David Knott: Private Client Trusts

7 August 2020

These days, with information at our fingertips, drafting your own will (or changing an existing will) may seem like the right thing to do. In some cases it may be, but there are many pitfalls that you may not be aware of or prepared for.

It is quite normal for parents to leave assets to their children, and/or their grandchildren. However, when it comes to minors (children under the age of 18), unless the will specifically names trustees that grant them the necessary investment powers, and provides for the creation of a trust to administer the bequest to any minor beneficiary – the wishes of the testator or testatrix (you as parent) will be prevented from being executed.

The Master of the High Court has no power to read anything into a will which is not clearly written into the will. This means that if the will does not specifically request the creation of a trust with all the conditions spelt out, the Executor will be obliged to pay any money bequeathed to a minor beneficiary to the Guardian’s Fund.

The Guardian’s Fund is a savings account managed by the Master of the High Court. All funds due to a minor are paid into this fund. The funds will earn simple interest which is credited from time to time. When the minor reaches majority age the capital plus the accrued interest can be claimed back.

Taking inflation into account, it is not enough to earn interest only. The capital sum eventually claimed by the minor will have greatly reduced spending power at the stage when it is claimed. If the funds are invested more prudently via a trust, for example into a general equity unit trust, the beneficiary will enjoy capital appreciation as well as a revenue return.

When it comes to minors being entrusted into the care of a guardian following the death of a parent, without a trust set up through the will to administer funds to pay for the maintenance of the minor –  the guardian has to apply to the Guardian’s Fund to release funds.

These applications are subject to the discretion of the Master of the High Court to accept or reject and most parents would surely rather not rely on a stranger to have the authority to approve money for the care of their dependents.

If professional advice is sought at the beginning of the will drafting process, issues that may cause your wishes to not be carried out will be avoided. For this reason alone, it is always best to not draw up your own will. Rather seek the advice and guidance of a professional.