As a new parent life can be fairly chaotic and slightly overwhelming. But as much as you are focused on that moment in time, it’s also crucial to consider the future for your child.
Many people assume that as parents, if something happens to one, the other will automatically inherit everything, but with no Will in place that’s not the case. In fact, if you are unmarried then your partner is automatically entitled to nothing of yours which may come as a shock. Writing a Will is something many new parents do not want to think about, the thought alone can be overwhelming.
But creating your Will can be done fairly quickly and easily with the right guidance and support every step of the way.
It’s also a common misconception that as parents, should something happen to you the children will automatically go to family members or friends that they know to be taken care of. Unfortunately this is not automatically the case. More often than not, the court gets involved to make the legal decision for guardianship of your children who could find themselves in the temporary care of social services until this is resolved.
By writing a Will, you can make sure that if you or your partner were to die, your family will be provided for and your estate will be divided the way you wish for it to be. But it’s not all about money. Making a Will also allows you to appoint guardians for your children. If these plans aren’t outlined in a Will, and both parents are deceased, your local authority or the courts may be left to decide who should look after your children.
If you don’t have a will:
• your spouse, cohabitee, partner or civil partner won’t automatically inherit everything
• if you are not married to your partner, they won’t inherit anything
• your children’s guardianship may be decided by a local authority or court
• any step-children or foster children won’t automatically inherit anything
By making a Will you are doing the following:
1. Identifying how you want your assets distributed after you die (e.g. your car, your house, your jewellery, even your clothing). Without a Will, your estate may be handled in probate court. The court will determine how to distribute your property and assets, and the result may be different than what you would have chosen. If your child is a minor, the family courts may appoint someone to hold and manage funds until your child becomes an adult at age 18 who may not be a friend or family member that you know and trust.
2. Selecting an “executor,” or the person (often a spouse, adult child or other close family member) who will administer your will upon your death. This person is responsible for seeing that all your requests are fulfilled, taxes and debts are paid and that your property is distributed to your heirs, so pick someone you trust implicitly and who can handle the financial duties of overseeing an estate.
3. Establishing if you wish to create a Trust. In some cases, parents may want to establish a trust. This allows you to control how and when your assets are given to your children. For example, you might not want your children to have immediate and full access to their inheritance at the age of 18. If you establish a trust, your funds will be held in that trust and controlled by another person that you select to be allocated in accordance with your wishes throughout your children’s lifetimes.
A parent with parental responsibility can appoint a guardian for his or her children in their Will, which they date, sign, and which provides that the appointment only takes effect on their death.
Parental responsibility is defined as ‘all rights, duties, powers, responsibilities and authority, which by law a parent of a child has in relation to the child and his [or her] property’. This is wide ranging and obviously carries significant authority and responsibility.
You must remember that not all parents will have parental responsibility and therefore be able to appoint guardians for their minor children. The basic position is that if the mother and father are married at the time a child is born, then both will have parental responsibility. But, if the father and mother were unmarried, only the mother will have automatic parental responsibility. The father can acquire parental responsibility if:
- he marries the mother
- he becomes registered as the child’s father
- he and the mother make a ‘parental responsibility agreement
- the court, on his application, orders that he shall have parental responsibility for the child.
This means that if the parents are not married and something happens to the mother, if there is no clarification for guardianship then the father will have to go through the courts in order to get guardianship – it is not necessarily automatic. This can cause upset for all involved.
Appointing a Guardian
The most important thing you can possibly do as a parent is to appoint a guardian.
Think carefully about who you would appoint as a guardian in the event that you, or you and your partner, were to die. If you don’t choose a guardian, the local authorities will decide – and while they often prefer immediate family, this is not automatic. Keep in mind that the appointment of a guardian automatically ends when your children reach the age of 18. Most people nominate more than one guardian, or at least a substitute guardian in case the first is unwilling or unable to take the role. Ensure you have the discussion with the people you wish to choose, as it is a big responsibility.
Choosing a godparent is not the same as choosing a guardian, as godparents have no legal rights. If you wish the godparents to look after your children if you die, you must name them as guardians in your will.
Consider a plan for your children’s finances
Think about how you could make arrangements to cover the expenses of bringing up your children in the event of your death. How can your estate cover these costs? In your Will, think about balancing the competing needs of all members of your family after your death. You need to feel confident that your estate will provide for your partner, children, step-children and any other people that you wish to benefit.
Do you have step-children or other dependents?
If you have step-children, they will not automatically inherit from your estate unless you specifically include them in your Will. So consider making arrangements in your will to meet their financial needs. This may also be the case for other children you care for – such as foster children – as well as any dependent adults that rely upon you.
Decide on the age of inheritance
Consider at what age you want your children to receive full control of their inheritance. Unless the Will says otherwise, they will automatically receive access to their assets at 18 in most cases, although the default in Scotland is for the child to inherit at 17. Before this age, your children can still benefit from their inheritance, but will not be able to manage it personally. The assets will be held on trust, and managed by a trustee to benefit your child. So, for example, the child may receive an allowance from a cash fund, but will not be able to withdraw money without the trustee’s consent. You may wish to opt for an age older than 18 before your children can become financially responsible, such as 21, so you can outline conditions for access.
Appoint trustees for your child’s inheritance
If you die before the age your children can inherit, their assets will need to be held in trust. To manage that trust, you need to nominate a trusted person, known as the trustee. Think carefully about how the best person would be to safeguard your children’s assets and help plan for their future. The trustee is essentially in control of your children’s finances. You might want to appoint your partner as one of the trustees, with either one or two further trustees, or substitute trustees in case both parents pass away. Generally a minimum of two trustees are required by law. The rules give precedence to family relations, and there’s a chance that the person who is chosen may not be who you would prefer.
If you have concerns or queries regarding inheritance tax and considerations around this, then make sure you speak with professionals such as the MMAW team.
It’s a good idea to review your Will regularly, particularly if something significant happens in your life, such as another child, a divorce or a death. Please feel free to get in touch with Beneficial Family Wills by emailing us on firstname.lastname@example.org