Guardians in Wills
Making a will is not necessarily the first thing you think about on the birth of your child! However, as you waft through a time of little sleep and lots of nappies, it’s certainly something worth thinking about when you get five minutes to spare!
The most pressing need is to decide who will act as your children’s guardian? Most parents make simple wills leaving everything to each other on the first death, and thereafter to the children in equal shares. If one parent dies and the other has parental responsibility, the surviving parent will usually take over responsibility for the child. But if the worst happens, and your children are left with no surviving parent, your choice of guardian will have a massive impact on the rest of their lives. It is therefore very important that you choose a guardian or guardians you know you can trust to look after your children as you would have looked after them yourself.
However, the job of looking after the children on a day to day basis is actually just half of the story – what about the monies they will be inheriting and the people responsible for managing those finances?
Your estate will be held by the people you appoint as your Executors and Trustees, for the benefit of your children, until they reach the age you specify. Your estate will encompass everything you own – your house, your bank accounts, your investments, your business, your personal belongings. It will also include the proceeds of any insurance policies which will, in most cases, pay off any mortgages and leave your offspring relatively well off. It is therefore essential that you choose people you can trust to manage the children’s assets for them, whether this will involve retaining or purchasing a home for your children and their guardians, or investing monies wisely for their futures.
Assuming that your children are the beneficiaries of your estate, your Trustees will have statutory powers to use estate income for their ‘maintenance, education or benefit.’ They will also have statutory powers to use up to half of a child’s capital entitlement for their ‘advancement or benefit.’ You can choose to widen these statutory powers if you wish, giving your Trustees complete discretion as to when such payments are necessary or enabling more than half of the entitlement to be paid out to the children when necessary. Alternatively, you could decide to include a discretionary trust in your will to widen the Trustees’ powers further with an accompanying letter of wishes setting out, more expressly, your wishes as to your children’s upbringing and the types of things you would be happily pay for from trust funds.
However you decide to cater for your children’s needs, it is important that you have had the chance to decide. If you do not make a will and address the above issues, you leave your family and friends guessing as to how you would like things to be done, and your children vulnerable.
For advice on making a will please contact Gemma Dilley, Assistant Solicitor at our Luton Office on 01582 514365 or Josie Birnie at our Berkhamsted office 01442 872643.