Many of us only realise for the first time how extremely important it is to make a will when we become parents. There are a number of extra factors which have to be considered when we have children. Who will take care of my children if I die? Who will be responsible for decisions about their education, health and other important matters? Some of the things you will need to consider are the following:
Guardians: As a parent of young children you will want to appoint people who have values similar to your own, usually family members but equally you may appoint friends if you prefer. The paramount consideration is always the welfare of your children.
Single Parents: If you are a single parent the other parent is already a legal guardian of your children. However, the other parent for one reason or another may not be in a position to take on the full time care of the children, so appointment of guardians is, if anything, even more important for single parents.
Trustees: These are the people who will mind the assets of the estate until such time as your children are old enough to do so themselves. This is obviously a very important role as the Trustees job is essentially to see to it that there is enough money to see your children through to adulthood and, hopefully, to be able to give each of them a nest egg to start off their adult lives.
Mortgage Protection Policies, Life Policies, etc.: Many young parents, struggling as they are with negative equity, unemployment, rising mortgage repayments and so on, feel they have nothing to leave. This isn’t so. Any house owner will leave a substantial estate behind them for the simple reason that their mortgage protection policy will clear the mortgage (subject to compliance with the policy conditions), meaning that your children will inherit a mortgage free house. Any other life policies, death in service benefits and the like will add to the value of the estate.
Trusts: By law, unless your Will says otherwise, your children will inherit your estate when they reach 18 years of age. Many parents feel their children are too young to deal with substantial amounts of money at that age. You can set up a Trust for your children so that your Trustees will remain in charge of the money until they reach whatever age you feel would be more appropriate to your children – many parents feel 23 or 25 years of age is about right.
Discretionary Trust: This is a particularly useful form of Trust if you have very young children or if you have a child with a disability. This type of Trust gives your Trustees wide ranging powers to apply the monies in the Trust as and how they believe is appropriate in the best interests of the child or children, and in accordance with the guidelines you have laid down for them in your Will.
The Family Home: You may also wish to consider at what stage the family home may be sold. Some parents may wish to ensure that the family home isn’t sold until the youngest child reaches a certain age and/or finishes her education, for instance, whilst others may prefer to leave it up to the Trustees.
All of the considerations set out above will vary considerably depending on the circumstances of each individual family unit. The important thing to remember is that you know your children best, therefore you are the person best qualified to decide the basis on which your children are to be looked after and provided for if you aren’t around to do so.