Often the inheritance of minor beneficiaries under a Will must be administered on their behalf after the death of the Testator. One way of doing so, is by using a Testamentary Trust.
The difference between an Inter Vivos Trust and a Testamentary (or Mortis Causa Trust) is that the former comes into effect during the founder’s lifetime and requires annual bookkeeping, statements and decisions by the Trustees, whereas the latter comes into effect on death of the Testator who created the Trust in his or her Will.
If beneficiaries under a Will are minors at the time of the death of the Testator, and no provision has been made for administration of their inheritance, the inheritance will need to be paid into the Guardians Fund, for administration by the State. It is therefore important to provide for the administration of your children’s inheritance in your Will, should you pass away before any of them reaches the age of 18 (eighteen) years.
A Testamentary Trust is contained in your Will. Before the date of your death, no administration is needed, and should all the beneficiaries reach the age of majority before your death, no Trust ever needs to come into effect.
Because the terms of a Will (and of a Trust provided for in a Will) cannot be amended after the death of the Testator, the Trust terms that you include in your Will should be appropriate to enable the Trustees to invest, manage, and pay out the income of their inheritance to the minor beneficiaries.
Please contact our Estate and Trust Department to discuss the various options available to you when providing for minor beneficiaries in your Will.