Life is unpredictable and while no one wants to be faced with the situation leaving behind minor children it is important to consider if there are any minor heirs involved when dealing with estate planning and considering your Will, this consideration may be for your own minor children or provision for future grandchildren, as the case may be.
Where a person dies without leaving a valid Will their estate will devolve in terms of intestate succession and if a minor is an intestate heir, how the inheritance devolves will depend on the type of asset, namely:
- Immovable property: This will be transferred to the name of the minor child however it will be managed by the legal guardian of the child and the property cannot be sold without the consent of the Master of the High Court; and
- Cash inheritance: This will not be paid to the minor, nor to the legal guardian of the minor but rather to the Guardians Fund at the Master’s Office.
How does the Guardians Fund work?
If a minor does inherit cash from an estate in terms of intestate succession the Executor, upon distribution of the estate, will pay over the monies to the Guardians Fund where an interest-bearing account will be opened in the name of the minor heir. The purpose of the Guardians Fund is to protect vulnerable minors from the monies being squandering by their legal guardians.
The monies, being the capital plus accrued interest becomes claimable when the heir attains the age of 18 years. It is possible for the legal guardian to claim for living expenses and costs of basic needs for the minor child, including medical and educational costs. This would involve the legal guardian making an application to the Masters office and providing proof of all claims. This can become tedious and turnaround times with the Masters office being less than favourable.
How to avoid the Guardians Fund?
The best way to protect your minor’s inheritance and ensure that needs of your minor heir are looked after speedily and efficiently is to make provision for a Testamentary Trust in your Will.
Your Will becomes the Trust Deed and you can appoint the Trustees and set out how and when the minor will receive their inheritance. The Trust will be registered at the Masters office during the administration of your estate and your Trustees will manage the assets, including monies, until condition for termination is met, usually by a stipulated age.
It is important that you ensure your Will is up to date and provision for all heirs are made and our team in our Wills and Estates department are ready and able to assist.
Helen Jackson, Senior Associate, helen@caf.co.za
Written by Helen Jackson
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).