Question: We are a married couple with three children ,all under the age of ten years. We wish to make a Will , to cover, a situation of us both dying simultaneously leaving our children with no parents. Our main assets are the family home and farmlands. However, it is too soon to try and decide which of our children is better suited to farming or indeed who should get what. Have you any suggestions for a Will?
Answer: In the unfortunate event of you both dying simultaneously or within a short time of each other, one of the options available is to make a Will leaving the assets in trust for the children. This would be a Discretionary Trust Will, giving the Trustees the power to decide who the farm and the assets goes to at the appropriate time.
WHAT IS A DICRETIONARY TRUST WILL?
This is the most common type of Will used in a situation such as yours, whereby, both parents die around the same time. The parents know they want their children to benefit from the assets but they are all under the age of eighteen and it is impossible at this stage to decide, because of their ages ,as to how the estate should be divided when they are older.
In your Will , you appoint people ,(usually two, but it does not have to be two ) that you absolutely trust for example , a brother , sister, close friend, to be the Trustees of your estate on your death for the benefit of your children until they reach a certain age.( It is not advisable to hold assets beyond the youngest child reaching 21 years in a Discretionary Trust Will due to tax considerations . It is not intended to deal with these in this Article)
By virtue of the Powers that you give to the Trustees in your Will , they will have absolute discretion in deciding when and what each child will benefit, depending on circumstances as the children get older. For instance, the Trustees might note, that one child as they get older has an interest in farming over and above his/her siblings and therefore decide that that child should get the farm.
Or on the other hand, the Trustees may decide that the farm should be sold as none of the children have an interest in it and that the money realised from the sale of the land could be put to better use by the children for university or otherwise rather than seeking to hold on to the asset.
The Trustees must act in the best interests of the children .The Trustees , are in many ways, representatives of you and they will be making decisions based on the different circumstances that may arise in the lives of the children in the same way that parents do , until the children reach a certain age. Being a Trustee is a very powerful position ,that carries with it major responsibilities.
It is extremely important to choose your Trustees wisely and as the name implies that you trust them. In addition , it would be wise to speak to them beforehand to make sure that they are happy to take on that role should such unfortunate circumstances arise.
Finally, to enable, the Trustees to be in a position of acting to their maximum capacity , and for the absolute benefit of the children ,it is advisable that they are given as much power as is possible.
LETTER OF WISHES.
At the same time as you make this Discretionary Trust Will, you may wish to write a Letter of Wishes as a future guidance for your Trustees in exercising their discretion. In it, you would be expressing what your wishes would be for the children and how you think you would like the estate to be managed by the Trustees. Although your letter will not be binding on them ,in many ways it could be the most important practical tool to assist the Trustees in reaching early decisions ,and sometimes for managing general family circumstances for many years.
Finally, a Will can and should be reviewed on a regular basis to reflect changed circumstances and in the context of a young family, it should in particular be reviewed more often as the children get older and more independent.
Published: West Cork People September 2009