Securing your child’s future (Part 4 of 4): Who do you trust to manage your children’s inheritance?
Another important factor that you need to consider is who you will make responsible to control your child’s inherited assets through the appointment of an Executor and/or Trustee in your Will.
Executors and Trustees are held to the highest standards of care and loyalty when acting in these roles, and they can ultimately be held accountable to your children for their inheritance. When making this decision it is important to ensure you appoint a person or team or people that you trust will work well together, are sufficiently capable of making financial and legal decisions for the sake of your children, and whom you implicitly trust would do the right thing by your children in accordance with what you would have wanted to be done. This can be an extremely hard decision to make, and professional guidance can be invaluable in helping you weigh up the comparative merit of different options for Executor and Trustee appointments. In a Will you can also provide that your Executor/Trustee has the ability to seek advice from an independent and appropriately qualified professional, for example an accountant or financial planner, which can be invaluable both so that your Executor/Trustee feels they can obtain such advice to validate or guide their decision-making, and also to ensure that they are maximising your children’s inheritance for their future benefit and financial security.
A Will can also limit the age at which your children have the ability to take control their own portion of your Estate. If you have young children it is important to discuss such an age limit otherwise your children may likely have access to their inheritance at the age of 18 without any controls in place.
One further matter to consider is whether you want the persons you appoint as the legal guardian for your children to also have control over your children’s inherited assets. This is to be determined on a case by case basis as in some instances we may recommend there are advantages in having the same person/s as both your child’s legal guardian and also the Executor/Trustee of your estate and any trust for your child, however in other circumstances we may find good reason to recommend you appoint separate people to these roles, especially if you have concerns about how capable or trustworthy the person you wish to appoint as your child’s legal guardian may be in relation to financial matters.
Importance of Backup Attorneys
Many Wills and Estate Planning documents suffer for lack of in-built redundancies. If you have many people you trust then there is little harm in having one or several layers of backup appointments to key roles, and doing so can assist to future-proof your Will against future changes in your family circumstances.
In addition to having a Will, an Enduring Power of Attorney is also strongly recommended. An Enduring Power of Attorney is a living document which outlines who can deal with your financial matters in your place either from the date that it is signed or when you become legally incapacitated (you can tailor this aspect within its terms to suit your wishes). It may well fall to your backup Attorneys to have the important task of holding down the fort in case both you and your partner lose capacity (or in case one of you has died and the surviving one of you has lost or later loses capacity) in some accident before their children reach adulthood. These backup Attorneys will be able to deal with all financial and many legal matters as you would have done, and this means that they will be able to do things to significantly alleviate the pressure and stress such a scenario otherwise imposes on your children. For a few examples, they can ensure your child’s schooling continues to be paid for, that they have a roof over their head, and that all appropriate provisions can be made for them which you would have normally attended to yourself.
We are here to help
Our friendly and professional Wills and Estate Planning specialists can provide you with peace of mind, and ensure that the future of your family is secured against the risks of any death or loss of capacity, by discussing and assisting you to prepare and implement a practical and comprehensive Will and other complementary Estate Planning documents.
For more specific information on any of the material contained in this article please contact Nick Muirhead on +61 8 8210 1220 or nmuirhead@normans.com.au.
