Estate planning is rarely at the top of our to-do list, yet it is one of the most practical acts of care we can give our families. A well-structured plan can make the difference between a smooth transition and a costly, emotionally draining process at a time already filled with uncertainty. One element often overlooked – and misunderstood – is the Guardian’s Fund.
What happens when a minor inherits?
When someone passes away without a valid Will, they die “intestate.” If a minor child inherits in this way, or even through a valid Will that does not set up a trust, the executor is obliged to transfer those assets into the Guardian’s Fund. This state-run fund, administered by the Master of the High Court, is meant to safeguard the interests of minors and others unable to manage their own affairs.
On paper it sounds reasonable. The money is invested by the Public Investment Corporation and earns interest set by the Minister of Finance. There are no admin fees. But the practical reality is less appealing: access is slow, bureaucratic, and requires guardians to justify every withdrawal with piles of paperwork, whether for school fees, medical bills, or daily living costs. Added to that, the investment strategy is one-size-fits-all and has even been exposed to cybersecurity risks.
Why not look for a better way?
For parents of minor children, the key is to avoid the Guardian’s Fund altogether. That means having a valid Will and, critically, setting up a testamentary trust within it. This type of trust only comes into effect upon your death and holds assets for your children until they reach an age you choose – often older than 18, when they are more capable of managing money.
You appoint trustees to manage these funds. Sometimes a guardian can also serve as trustee, but it is often wise to separate the roles: the guardian focusing on the child’s wellbeing and daily needs, while the trustee ensures the money is managed prudently for the long term.
Choosing the right guardian
Selecting a guardian is deeply personal. Ask yourself: Does my child already have a strong bond with this person? Will their schooling and friendships be disrupted? Do they share my values and have the emotional and financial stability to shoulder the responsibility? And importantly – are they willing to take it on?
Final thought
Estate planning is not just about money. It’s about care, continuity, and peace of mind. Review your Will and guardian choices regularly. Circumstances and relationships shift, and your plan should shift with them – always with your child’s best interests at heart.
Dirk Groeneveld, Certified Financial Planner
t. 083 261 9287
—
Previous Columns:
- How Many Good Summers Do You Have Left?
- Retire With A Plan. Then Tear It Up.
- It May Be Time to Reconsider What Retirement Means to You
- We Love A Sale, Except When Investing
- The difference between saving and investing
- Where is our focus?
Read more on Salute Your Own Self at Client Care
Recent Comments