Ensuring their children are cared for when they pass away is one of the primary reasons people draw up a will. But what happens when the best interests of the children that are left behind are not at the forefront when an estate is administered and maintenance needs to be paid?
This is, unfortunately, a question that many minor beneficiaries and their guardians have had to come face to face with over the years in their dealings with the Guardian’s Fund.
The Guardians Fund is a Government entity, regulated by the Master of the High Court, that is responsible for safeguarding the inheritance of minor beneficiaries until they turn 18 and gain contractual capacity, without which one cannot legally inherit. This can cause quite a hitch in the fulfilment of the testator’s wishes as the inheritance left behind for a minor is usually intended to fund their education and living costs, but now sits locked away in a Government-owned fund.
The Fund does make provision for guardians to claim from a beneficiary’s inheritance when the money is needed to pay for school fees, clothes, medical fees, and any well-motivated needs. These claims need to be submitted on the correct government documents and must be accompanied by certified identification documents, personal banking details, fingerprints, and other documentation that is deemed necessary to motivate the specific claim. When possible, these claims are paid directly to the third party and never passes the hands of the beneficiary or their guardian.
These strict regulations are intended to eliminate any fraudulent claims and misuse of a minor’s inheritance. Unfortunately, the misconduct has recently been proven to stem not from the claimant’s side, but from the Fund’s administrators.
Although the year is still young, 2020 has already seen the investigation and exposure of the Master of the High Court’s misconduct. 15 Master of the High Court offices were temporarily closed in February as the Specialised Investigating Unit commenced raids to investigate allegations of maladministration, corruption and fraud. In Mpumalanga, there was a case against officials who amassed R1.7 million through the means of fraudulent activities, while an assistant of the Master of the High Court in Kimberly faced charges of corruption as he extorted claimants of deceased estates.
Cases have also been reported in 2020 where the Fund failed to pay school fees from safeguarded inheritances. Many guardians and beneficiaries have had difficulty contacting the Fund in such circumstances, only being able to communicate with the Fund when a lawyer or court order enters the frame. While the intent of the Guardian’s Fund is without a doubt positive, aiming to safeguard funds, its administration by the Master of the High Court effectively tramples those good intentions.
When it comes to planning your estate and finding a way to leave an inheritance for your children in your will, the best course of action is the use of a trust. Both an inter vivos trust (a trust that is set up during the founder’s life) and a testamentary trust (one that comes into existence with the administration of a will) will safeguard the inheritance of a beneficiary in the same way that the Guardian’s Fund is supposed to, while beneficiaries and guardians will be able to access the inheritance through simpler, and more timely means through the trustee(s).
When it comes to fully understanding the workings of trusts and understanding which trust structure will be the most beneficial to you and the inheritance you hope to leave behind for your children, it is prudent that you obtain legal advice to make sure your legacy and the wellbeing of your children are truly safeguarded.
This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your financial adviser for specific and detailed advice. Errors and omissions excepted (E&OE)