YOUR MONEY: How does one provide for one’s children in case both parents die?

Question: How does one provide for one’s children in case both parents die? Should their future caretakers be named in a will? And what about the assets left to them?

— Name withheld

Answer: A guardian should be appointed in the parents’ will to conduct all legal acts on behalf of the child in case both parents die. The legal acts include registering the child for school and claiming maintenance on their behalf. In this instance, the master of the high court will issue a certificate or letter confirming guardianship. Either the executor of the estate or the person registering the estate at the  master can apply for such a certificate of guardianship.

Where a guardian isn’t named in a will, the person caring for the child can apply for guardianship at the high court. However, this takes time and is an expensive exercise due to legal fees.

With regard to the assets, there are mainly three ways in which it can be  passed on to the child.

First, the guardian can be named as the inheritor, meaning they can do with the money as they please. It is important for this person to have the best interest of the child at heart.

Second, if the child is the inheritor, the master  will transfer the assets to the Guardian’s Fund. The child’s guardian can apply on an annual basis for “maintenance” for the child, and the fund will pay expenses such as school fees directly to the school. When the child turns 18, they can apply for the balance of the funds to be paid to them. Thus the assets never vest in the guardian.

Third, parents can set up a testamentary trust in their will. Trustees manage and control the assets on behalf of the children and ensure that the guardian  receives sufficient funds to cover the child’s maintenance expenses.  This option, however,  involves increased administration and costs.

• Elmari du Plessis, Rossouw & Du Plessis Attorneys

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