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In this case study series, we examine how John and Sally’s choice of Will impacts the fortunes of their fictional family.
The purpose of these case studies is not to scare you. Our hope is to inspire you to make an informed choice about your Will, which is easy to do once you know the basics.
Nothing can minimise the pain of losing a loved one. But you don’t have to compound the problems associated with the death of a loved one by relying on the wrong type of Will.
As you will see, there is so much to gain by relying on the right type of Will.
Case Study 3: How To Protect The Kids
If you missed the first two make sure you also read Case Study 1 & Case Study 2.
Part 1: Meet John & Sally
Meet John, Sally and their four kids Jane 16, Toby 13, Alex 10 and Alice 6.
John 47, a public servant earns $120k per year.
Sally 44, a part-time physio earns $60k per year.
John and Sally have a family home with a mortgage, some super, about $30k cash in the bank thanks to a small inheritance to John, and Sally has also inherited $50k worth of BHP shares.
They're not rich, but with John’s one million dollar life insurance pay their combined estate including home and super is worth over two million dollars.
Part 2: From bad to worse for poor Sally
Unfortunately, in this fictional universe, our main character Sally has not coped with the death of her husband John.
For Sally, the loss of her spouse is too much to bear and eight years following John’s death her depression and drinking takes her life.
As with her husband John, Sally lost her life behind the wheel of her car, and like John, Sally had not updated her basic five-page Will.
Leaving children less than 18 years of age, Sally’s Will is totally inadequate to deal with this unthinkable, but all too possible scenario.
For John and Sally’s children, because their loving and well-meaning parents continually delayed updating their Wills, they are now faced with an uncertain future.
Part 3: The aftermath of Sally's death
If losing their parents was not enough of a burden to cope with, having to rely on their mother's basic five-page Will has left Sally's four children extremely vulnerable.
A major issue stemming from Sally’s basic Will is that it allows for her children to inherit at 18 years of age!
Anyone with children understands this is hardly a suitable age for a child so young to have complete control over a large sum of money.
How soon before young Alex buys that 1000cc motorbike? How soon before young Toby decides to invest his inheritance on the advice of his new best mate ‘from the pub’?
Part 4: John & Sally's alternate universe
Let's now suppose that John and Sally had relied on Wills from Will Wizard where they were able to set a more sensible controlling age.
Will Wizard enables parents to nominate a more suitable controlling age that a beneficiary must attain before they are able to take full control of their inheritance.
Setting a controlling age is a simple and effective strategy to protect young beneficiaries from making immature choices with their inheritance.
Part 5: The 'controlling age' safety net
In this alternate universe, Sally’s eldest son Toby (19yrs) is over 18 years of age but is under the controlling age of 25 nominated by Sally in her Will from Will Wizard.
Will Wizard provides for young beneficiaries like Toby who are under the controlling age to have access to his inheritance to cover his normal living, housing, medical, well-being, travel and education expenses.
However, Toby would not have full personal control of his inheritance, which would be managed on his behalf (and for Toby’s benefit only) by Sally’s nominated executor (or the executor's personal legal representative) up until Toby reaches the controlling age of 25 set by Sally’s Will.
This sensible protection would have prevented a naïve 19 year old Toby from making the unwise financial decision of investing his entire inheritance in a dubious 'get rich quick' scheme with his new best mate ‘from the pub’.
Part 6: Preservation trusts for beneficiaries under the controlling age
Thanks to John and Sally relying on comprehensive Wills from Will Wizard, their executors are provided with detailed instructions on how to utilise 'Preservation Testamentary Trusts' to manage and protect the inheritance of a beneficiary like Toby that is under the controlling age set by their Wills.
These 'preservations trust' terms ensure that the executor understands John and Sally's wishes to, where practicable, preserve the capital of trust while utilising the income of the trust to pay for Toby's needs (for beneficiaries under 18 years of age, the executor works closely with the child's guardian to ensure the child is adequately provided for).
The executor is given the authority and flexibility in managing Toby's inheritance in whichever way best suits Toby's needs and tax status, with Sally's Will instructing her executors to seek professional financial advice before making any investment decisions.
Had Sally only relied on a basic 2-5 page Will, her executor would have been left without the ability to effectively manage and protect her children's inheritances until they were mature enough to do so themselves.
Part 7: So, what's the rub?
The conclusion from this case study is simple.
Die without a Will, or die relying on a basic 2-5 page Will and any child beneficiaries you leave behind (including any grandchildren) will have full control of their inheritance from 18 years of age.
Unfortunately for Sally, 18 year old Alex crashes his new high powered motorbike and fractures his spine, while 19 year old Toby invests his money very poorly and without any professional financial advice.
Had John and Sally relied on Will Wizard, their executor would have had the instructions and authority to manage their children's inheritances in practical and sustainable ways, and the financial outcome and the associated trauma for their children would have been very different.
Food for thought.
Read Case Study 1 & Case Study 2.
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Will Wizard Co-Founder
As always, if you have questions about the suitability of any Will for your needs and circumstances, seek independent legal advice.
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