Who will manage your child’s inheritance?
Who will manage your child’s inheritance if you die? It’s important to get this person right, as they’ll be responsible for striking a balance between providing your child with a secure childhood and preserving the inheritance as a nest egg for your child’s adulthood.
The person managing your child’s inheritance depends on the terms of your Will. The minimum inheritance age in Queensland is 18, so if your child is under 18 their inheritance will be under the control of an adult until your child turns 18. That adult is called a “trustee” and your child’s inheritance is held “in trust” for them.
Being a trustee is an important job. There are special legal rules around how a trustee must act in managing money.
You will appoint a trustee in your Will (ideally with 1 – 2 backups). If you have a standard Will, then your child’s inheritance will be released to them when they reach the inheritance age. If you have a testamentary discretionary trust (“TDT”) Will, then your child may receive income and assets from your estate over a long period.
TDTs are big topic [and one that we love!]. A TDT may offer some big advantages to how your kids’ inheritance is managed (hello tax flexibility and various financial protections!). For more info take a look at:
Generally, trustees have power to release funds from trust to your child’s remaining parent or guardian for your child’s maintenance, education, and advancement in life (eg. to pay for school fees!).
If the trustee is also the parent/guardian it’s easier for the parent/guardian to access funds for your child and takes away the chance of conflict between parent/guardian and trustee. However, having different people in those roles can act as a check and balance on how funds are being used. There are many ways we can customise the control positions in your estate plan to suit your family’s circumstances.
In our heart-to-heart consult we discuss the roles in your estate plan, how they work together, and how your top options may work in practice. Family relationships can be tricky! We take the time to reality check your estate plan with you. This is an important step! There’s little point recording a highly detailed plan if it’s doomed to fail because it doesn’t meet your loved one’s unique circumstances or needs.
Ready to get your estate plan sorted? Head to ‘request a booking‘ to get started now.
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