From recent reports in the Media, it appears that the officials of the Guardian’s Fund, run under the auspices of the Master of the High Court (North Gauteng Division) have plundered the Fund to the tune of some R 80 million.
The Guardian’s Fund, established in terms of the Administration of Estates Act, is a Fund that accepts benefits payable to minors and those who are unable to care for themselves financially for whatever purpose. The funds are predominantly those of minors and people with disabilities, and people due money which cannot be paid to them as they are untraceable. It is meant to be a safe haven and a refuge for their money until they are able to care for those monies themselves. Generally when they reach the age of majority (18 years) the moneys due to them are paid over.
It is not yet clear what the effects of the misappropriation will be on the many beneficiaries of that fund, and of course we wait for any sanction to be imposed on the perpetrators of this illegal appropriation but it does serve as a salutary warning to all, to ensure that their financial planning is up to date and in order – particularly providing for well draftd last will and testament.
Generally speaking, where minors are entitled to benefit from estates, (leaving aside other assets) cash awards must be paid into the Guardian’s Fund, unless the will directs to the contrary. It is wise therefore, to have a properly drawn will, that provides for the payment of any benefits to a minor to be held in trust for their benefit, and utilised by the trustees of that trust for the maintenance, upkeep and support of those minors. Where there is no properly valid will providing for the establishment of a trust, the moneys must be paid over to the Guardian’s Fund. With payment to the Guardian’s Fund, it can often be difficult to access that money quickly, for ongoing expenses – whereas if a trust has been established in the will, the trustees will take control of the monies, and utilise it for the maintenance and upkeep of those beneficiaries.
With a will, provision can be made for the trusees to retain the money for a period beyond the age of majority – for example when the beneficiaries would more financially mature and possibly in a better position to handle their own finances. Prepare, then, and ensure that you have a will and a proper estate plan in place, which would prevent the type of difficulties which we may see arising from the plunder of the Guardian’s Fund.