Providing for your children in your will is an essential part of being a parent. In this month’s blog we have covered the best ways to provide for your children from appointing guardians to discretionary trusts. It’s the best way to put your mind a rest, in the unfortunate circumstance that you die while your children still need to be cared for.
Appointing Guardians for your Children
The most important part of providing for your children in your will, is appointing guardianship for them in the circumstances that both parents have died. Guardianship isn’t a nice thing to have to think about and spending money on writing your Will might not be top of your list of things to do right now, especially with all the costs involved in raising little people, but it is part of being a parent.
Guardianship is dealt with by The Children Act 1989 – you can appoint a guardian through your will if you acquire the parental responsibility of the child. This includes all the legal rights, duties and responsibilities.
The people below are people considered to have parental responsibility under the act:
- The Mother of the child
- The Father of the child
- A guardian appointed by will of the person who has parental responsibility
- A person granted parental responsibility of a child through court
The idea of you dying and leaving your children behind, unsure of the outcome would be horrific, but knowing that you have arranged guardianship for them in your will, would be a weight off your shoulders.
Choosing Your Guardians
The people who are most likely to provide the most care for your children may not be the most responsible and careful with the money. However, a guardian acts with all the powers a parent would have. By selecting a guardian, you are not making them a trustee.
Unless you specify otherwise, the executors will become your trustee’s and pull the strings and your guardians will look after your children.
Therefore you have to find guardians who can work cooperatively with your trustees.
Another issue is the trust powers you give to your trustees. You may well decide to narrow those powers, either by putting it within your will or through a letter of intent to both the trustees and the guardians.
Trustees can hold money/property at their discretion. They can distribute it on some specified beneficiaries. The beneficiary could be outright or subject to a condition, such as the attainment of a particular age. The first is a ‘discretionary trust’. The second is an ‘interest in possession’ trust.
In law, a beneficiary who has attained the age of 18 can demand to be paid their entitlement immediately, if no trust conditions are specified. Legal actions to enforce this are few as eighteen year olds are not likely to sue a trustee family member or guardian.
Possible advantages of deferring payment:
- To prevent a large amount of money being spent recklessly due to the young person never having access to a large amount of money
- To prevent a large amount of cash falling into the hands of an ex-spouse, through the divorce courts.
- To provide flexibility to the trustees to use the money in what they think is in the best interests of the children.
A possible disadvantage:
- Trusts are no longer subject to the tax advantages of former years. You must take professional financial advice on how a trust will be taxed before you set it up.
How old must your beneficiary be to make best use of your gift?
There is no way of knowing what circumstance may affect our lives so you could argue that whatever age you choose, it would not necessarily be efficient.
However, people tend to be more careful with money, and put it to better use, as they age from 18 into their twenties.
Most people assume that a beneficiary receives this at 18. The actual choice is entirely for you, the testator.
Most trusts provide for the trustees to be able to use income or capital of the trust for ‘education and training’, a definition which has been stretched to cover a wide range of things, including some unusual activities over the years!
Who should hold money for them until they reach the specified age?
- Give them the money as young as you legally can
- Give the money to their parents
- Give the money to the specified trustees
How Wise Owl Wills Can Help
Wise Owl Wills provides a smart, online will writing services start at just £35.99 including VAT for a single will, and only £47.99 including VAT for a 2-person mirror will. This means that when writing your will, you and your other half can create a mirror will with the same wishes as one another which will be effective when choosing a guardian to look after your children.
Also, solicitors can be pretty expensive, so using our online will making kit is a much more cost-effective way of securing a legal document to protect your assets and possessions for the future. So you don’t have to worry about cutting short on money that can be used on your children and Wise Owl Wills works on any device too, including your phone, so you can make a start anytime you want for your complete convenience.
So what are you waiting for? With our cost of writing a Wise Owl will at such a fantastically low rate, and such a simple process too, it’s clear to see it’s the wise decision in doing a will online. It is a cost-effective and secure way to secure your children’s future with a Wise Owl will.