Your Will Needs to Do More Than Just Appoint Guardians

Your Will Needs to Do More Than Just Appoint Guardians

While appointing guardians for your children in your will is a crucial step in ensuring their care if you’re no longer around, it’s only part of the equation. Equally important is securing their financial future, which is where will trusts come into play. A will trust can provide the necessary financial support for your children’s upbringing, education, and wellbeing.

The Limitation of Appointing Guardians Alone: Appointing guardians in your will ensures that your children will be cared for by someone you trust. However, without financial provisions, guardians may face significant challenges in providing the level of care and support your children need, especially in the long term.

Understanding Will Trusts: A will trust is a legal arrangement where you set aside assets (like money, property, or investments) in a trust to be managed by trustees for the benefit of your children. The trust can specify how and when the assets are to be used or distributed.

Why Include a Will Trust in Your Will?

  1. Financial Security for Your Children: A will trust ensures there are funds available for your children’s upbringing, education, and other needs.
  2. Control Over Asset Distribution: You can specify how the assets are used, whether it’s for school fees, living expenses, or a lump sum when they reach a certain age.
  3. Protection from External Risks: Assets in a trust are generally protected from risks such as bankruptcy or divorce settlements of the guardians.

Choosing the Right Trustees: Selecting trustees is as crucial as choosing guardians. Trustees will be responsible for managing the trust’s assets and making decisions about the financial provision for your children. It’s essential to choose individuals who are trustworthy and capable of handling this responsibility.

Key Considerations for Setting Up a Will Trust:

  • The Age of Distribution: Decide at what age your children should receive direct control over the assets.
  • Flexibility for Unforeseen Circumstances: Ensure the trust allows for adjustments to cater to changing needs of your children.
  • Tax Implications: Consider the tax implications of setting up a trust and how it affects the estate and beneficiaries.

Appointing guardians for your children is a significant step, but it’s not the end of your responsibility. Including a will trust in your estate planning ensures that your children are not just cared for but also financially supported. It’s a comprehensive approach to securing your children’s future and giving you peace of mind, knowing they are fully provided for in all aspects.

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