Those of you with minor children who have your Wills with us will have noticed that we always put in clauses to establish a (Testamentary) Trust to cover minor beneficiaries. This does not cost you anything as it only comes into effect if you pass away and your children are still minors. Note that the age of majority changed recently from 21 years to 18 years, so as soon as a child is 18 years or older then they are able to manage their own affairs and a Trust is not necessary.
What happens if there is no Trust in your Will? The law is then that any inheritance due to a minor must be paid to the Guardians Fund at the Master of the High Court and they manage this for the minor until they reach the age of 18 years. The disadvantages of this are that the monies are not invested in any growth assets, but on a fixed deposit. The other disadvantage is that the guardian of the minor must apply to the Master every time they need funds for maintenance, schooling, etc, with various documents – these have to be completed and lodged every time you apply for funds or have a claim for payment.
The advantage of having a Trust company manage a minor’s funds are that they will meet with the guardian and discuss the needs of the child. They can then manage the funds and invest in capital growth assets as well as income producing investments depending on the needs and age of the child. Payments to the guardian for expenses are also much easier and usually a debit order could be arranged on a monthly basis to pay for these expenses.
What one of our clients had to say about Sentinel International (the Company we use for Trusts for our clients):
“They are approachable and easy to get hold of. Any queries are sorted out quickly. They are flexible and not cold and hard, and I am happy with the way they are managing the money/investments for my minor children.” GR.