Make sure your will looks after family’s kids - financial expert

A financial advisor is urging people who are planning their wills to think about the future of young family members – and ensure they get the inheritance they deserve.

Mike Jordan, whose firm Jordan Financial Management has been a trusted source of financial information in the West Midlands for more than two decades, warns there may be additional steps to take when planning your estate plan if you want to protect the interests of young loved ones.

Mike (pictured), based in Sutton Coldfield, said: “Thinking about death is uncomfortable, but a robust estate plan is essential to ensure your assets are distributed in the way you want when you are gone.

“However, this is especially true if you have a young child, grandchild or other relative who you would like to inherit from you.

 “Too many people don’t know that there are specific steps you can take in your will, to ensure your younger loved ones get what you want them to have.”

 One important step, if you are a parent or guardian of a child, is naming a guardian who would be responsible for their care if you pass away.

Usually, if one parent passes away before the child is 18, the surviving parent will take parental responsibility, regardless of any guardianship appointment. However, things get more complicated if there is no surviving parent or valid will.

Mike explained: “In these cases, the court will typically appoint a guardian – even if you’ve informally agreed with family or friends about who will care for the child, the court can disregard it.

 “You need to have a guardian written into your will – a grandparent, aunt or uncle, for example – to ensure the court’s outcome would match with your wishes.”

Another important thing to consider when naming a child as a beneficiary in your will is how those assets will be passed on to them.

By law, a minor is deemed not to have the capacity to receive any money or assets until they become a legal adult. Usually, their inheritance is kept “in trust” until they turn 18 – but Mike suggests it may be worth setting up a trust now, in your lifetime.

He said: “A trust is an arrangement that names a trustee to manage or distribute the assets in the trust, on behalf of the beneficiary.

“One major benefit of this is you can outline the circumstances in which the child can use the assets, ensuring not only short-term payout but long-term financial security. For example, they might be able to use the money for education or living costs while still under 18.”

These decisions can be made in the trust creation process, or by writing a ‘letter of wishes’ to go alongside your will.

Alternatively, rather than making these decisions now, you could allow the trustee to make decisions they believe are right for the beneficiary.

Mike explained: “A common example of this would be if you wanted to leave assets to a grandchild, the trustee could be their parent, and you could entrust those crucial decisions to them.

“It is also worth remembering that it’s not a hard-and-fast rule for the assets held in a trust to be given to a child as soon as they turn 18. You can set out when, if ever, this happens – so you might decide they can take an annual income from the trust rather than one lump sum, or elect a trustee to continue making decisions until they’re 25.”

Mike recommends seeking professional legal advice when setting up a trust, as the process can be complex, and it’s useful having a guiding hand.