Article by Zoe Coleman – Gold Coast based Wills and Estates Solicitor at Robbins Watson Solicitors
Introduction
The thought of a future where you are not around to raise your children is undoubtedly unsettling. However, planning for such possibilities is essential for your children’s safety and well-being. By appointing a guardian in your Will, you gain reassurance that your minor children will be cared for and supported, even if the unexpected happens.
At Robbins Watson Solicitors, we specialise in providing comprehensive estate planning strategies. Our goal is to guide families through the estate planning process with confidence, ensuring that their loved ones are provided for according to their wishes.
Understanding Guardianship
Guardianship refers to the legal responsibility granted to an individual to care for and make decisions on behalf of a child under the age of 18, when their parents have passed away.
You can appoint a ‘testamentary guardian’ in your Will. This should be someone you trust, who shares your values and parenting style. Typically, the appointment of a testamentary guardian takes effect upon the death of the last surviving parent, and your Will should express this.
The right to appoint a guardian in your Will is legislated by the Succession Act 1981 (QLD) subject to the Family Law Act 1975 (Cth), which outlines the rights and duties of appointed guardians.
Selecting the Right Guardian
Choosing a guardian for your minor children is one of the most critical decisions you’ll make. You can appoint one guardian or multiple guardians, but you should carefully consider the conflicts that could arise out of having multiple guardians appointed. Instead, consider naming an alternate guardian who can step in if your primary choice is unable or unwilling to fulfill the role. This ensures that someone will always be ready to care for your children.
Some factors to consider when appointing a guardian are:
Values and Beliefs: ensure that the potential guardian shares similar values, beliefs, and parenting philosophies. This alignment will help maintain continuity in your children's upbringing and preserve the principles you hold dear.
Emotional Connection: consider someone with whom your children already have a strong emotional bond. This familiarity can ease the transition and provide emotional stability during a challenging time.
Age and Health: the age and health of the guardian are significant factors. Choose someone who is physically capable of raising your children and likely to be around for the duration of their upbringing.
Financial Stability: while financial capability isn't the sole determinant, it's essential to consider a guardian who can manage the financial responsibilities of raising children. However, this can be supported by robust estate planning on your part.
Willingness and Capability: ensure that the chosen guardian is willing to take on this responsibility. Have an open and honest discussion with them about the potential role and its implications.
Planning for Your Child's Financial Well-Being
Testamentary Trust
A testamentary trust is a type of trust that is established through a will and only takes effect after the death of the individual who created it (the testator). It allows the testator to specify how their assets should be managed and distributed for the benefit of their beneficiaries, often their children. The trust is managed by a trustee, who is appointed to oversee the assets until the beneficiaries reach a specific age or meet certain conditions outlined in the Will. A testamentary trust can be particularly beneficial for minor children as it ensures that their inheritance is protected and managed responsibly until they are mature enough to handle it on their own. It can provide for their education, living expenses, and other needs, offering peace of mind that your children will be cared for financially in the event you pass away. This arrangement can also prevent the immediate distribution of assets, reducing the risk of mismanagement or loss of the inheritance.
The team at Robbins Watson can assist you to establish a testamentary trust through your Will that will provide financial support and stability for your children.
Superannuation
Superannuation generally does not form part of the estate. You should generally have a valid binding death benefit nomination in place to guarantee that the funds in your superannuation account are distributed according to your wishes. Upon death, these funds are directed to the nominated beneficiaries or, in some cases, to the estate. These benefits can be paid as a lump sum or as an income stream, depending on the beneficiary's relationship to you and the rules of the superannuation fund. Typically, you can nominate your spouse, children, or other dependents to receive your superannuation death benefits. However, it is important to note that depending on the beneficiary, the benefit paid may be subject to tax.
When a person passes away, the trustee of the superannuation fund will pay the death benefit in line with the valid binding nomination made by the deceased. Without a valid binding nomination, the trustee has the discretion to decide who the beneficiaries will be.
By having a valid binding death benefit nomination and naming your children as beneficiaries, you can provide them with a more straightforward and faster access to the funds, which can be crucial in supporting them financially during a challenging time. These benefits can offer substantial financial support, helping cover living expenses, education costs, or other needs, particularly if your children are financially dependent on you.
Life Insurance
A life insurance policy is another way of ensuring the financial well-being of your children. If you pass away, your life insurance may be able to provide financial support to your children, ensuring the policy can cover the cost of living, education, and other essential needs. Additionally, you may consult with a financial advisor.
Conclusion
Planning for your children's future involves thoughtful consideration and proactive measures. By selecting the right guardian and creating a solid estate plan, you can provide your minor children with stability and security, even in your absence. Taking these steps is a profound expression of love and responsibility, safeguarding your children's well-being.
At Robbins Watson Solicitors we understand that planning for the unexpected requires sensitivity and compassion. Our team of expert wills and estates lawyers are here to help you to create an estate plan that reflects your wishes and simplify what can be a sensitive and overwhelming process. Click here for more information about our Wills and Estates services or to start the process online.
Article by Zoe Coleman
Zoe is a Wills and Estates Solicitor at Robbins Watson Solicitors, a Gold Coast law firm specialising in wills and estates. You can book a free initial consultation with one of our Gold Coast Wills and Estates Lawyers here or call our office on (07) 5576 9999.