Protecting Your Children
Without a Will the Courts will issue an order as to who will have control of your children and how your assets are invested should both parents die before the children reach 18.
There are two main provisions, therefore, you can make in your Will if you have children under 18 and wish to be in control of your affairs.
The first is to nominate who you would wish to have as their Legal Guardians, should both parents die before they reach the age of 18. You need only appoint one person, but it is normal to have two, perhaps a husband and wife. You can decide whether they are jointly responsible or, one is nominated a first choice, with the second in reserve, in case the first is unable to fulfil the responsibility.
Only parents with Parental Responsibility (PR) can appoint Guardians. A mother will always have PR unless this has been removed by the Courts, or the child has been adopted. A father who is married to the mother will automatically have PR unless this has been removed by the Courts, or the child has been adopted.
An unmarried father will not automatically have PR unless he was registered as the father after December 2003. If he is not registered as the father, or that registration took place prior to December 2003 he will not have PR unless it has been agreed by the mother. This can be arranged in a number of ways; re-registering of the birth, in writing, using a Parental Responsibility Agreement, or by marrying the father. Any agreement must be registered with the Principal Registry to be valid.
If the birth parents divorce they do not automatically lose PR, although a Residence Order is usually issued by the Court to determine where the child will live.
Within their Wills parents with PR can nominate their chosen Guardian but this will only take affect once both parents have died. It is important to choose Guardians who can, and will, bring the up the children as you would wish. Many people consider Grandparents of the children, because of the obvious closeness of the relationship, but consider their age by the time the children reach 18. A court would not normally appoint Grandparents.
It is obviously important to discuss, and agree, the appointment with your chosen Guardians and it is useful to document any particular points you need them to consider. In many instances this is a reciprocal agreement.
The second area is for your Will to appoint Trustees to manage your assets for the benefit of the children should both parents die before they reach age 18, or a later age should you wish. It can help the Guardians if one is also chosen as a Trustee.
The Trust created in the Will should grant powers to the Trustees to manage the funds for the benefit of the children, as you would wish if you were still alive. This can include payments for items such as schooling and the provision of housing, if required. It may be necessary to make provision for financial support to the Guardians. This can be in the form of a legacy in your Will to the Guardians, or via simple term assurance written in trust for the Guardians, or children.
The age at which the children can inherit in their own right is an important decision. It is usually between 18 and 25 and will decide on your view on when you feel they should accept responsibility for what can be a significant sum of money. Most parents choose 21.
However, the Chancellor, in his wisdom, stated in the 2006 Budget that if an age other than 18 is chosen, and the estate is liable to Inheritance Tax, taxes will be imposed on the trust. You will need to decide if those taxes are worth paying in order that you can choose the age you feel is most appropriate.
The people you choose as your Trustees must understand that they will be responsible for the trust until your children reach their inheritance age, so it can be a long-term commitment. As stated earlier it is usual to include a Guardian and it also quite normal for Executors to be Trustees. You will know the people you are choosing are in the best position to decide what is best for your children.
As we said at the beginning, without a Will, all of this will be decided by the Courts!!
There are a number of decisions you need to make before you can complete your Will, it is important to discuss these with each other and the chosen Guardians and Trustees before you commit them. Please do not hesitate to contact us should you need any advice, or a sounding board.