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Legacy Planning for your children: what to consider

Deciding where you want your money to go after you pass away certainly isn’t the easiest topic to tackle—but it is an important one. Especially if you have children. Legacy planning is an essential way of making sure your children are provided for if the worst happens. Here are important things to consider when making arrangements, and ensuring a smooth transition to your loved ones.

1) Appoint a guardian

Appointing a guardian for your children is the first vital step. As you make your choice ask yourself the following questions:

  • Is the guardian physically able to care for your children?
  • Are they financially secure, and with a stable life in other areas?
  • Do they live relatively nearby to avoid a disruptive move for your child?
  • Does the potential guardian share your values and overall approach to life?

Even if you’ve found the ideal guardian who’s willing to take on the responsibility, it’s still important to take a couple of precautions. First, consider including a stipend for the guardian in your will so that their costs are covered, protecting your child’s inheritance from potential misuse.

Second, for a little extra security, consider appointing a legal protector in your testamentary trust that tasks whomever you choose with supervising the guardian to ensure your child’s welfare is safeguarded.

2) Set up a testamentary trust

A testamentary trust can help ensure your legacy is managed to your wishes, and can be set up as part of your will or attached to a life insurance policy. Among other things, it sets out who can manage your legacy’s funds, what they can be used for, any conditions attached to their release, and so on.

The trust is normally put in place until your child reaches the age of majority, but it’s also possible to extend it for longer. This can be a prudent idea for large bequests, staggering the payments so that a youngster with little money experience doesn’t receive too large a windfall at once.

There are usually three parties to a testamentary trust:

The Settlor: This is the person leaving the legacy.

A Trustee: The person who manages the trust on behalf of the beneficiary.

The Beneficiary or Beneficiaries: The ultimate recipient of the legacy, typically a spouse, children, or other family members

As with appointing a guardian, the settlor can also appoint a protector with the power to influence or even replace the trustee if they’re not held to be acting in the best interests of the beneficiaries.

3) How much should you leave?

As the well-known Warren Buffet quote has it, “You should leave your children enough so they can do anything, but not enough so they can do nothing.”

The amount you bequeath comes down to personal parental choice, but many people feel that leaving your children with nothing to work for denies them a vital part of life’s experience.

Some parents decide that paying for a full education is an adequate legacy. Some feel that it’s best to leave their children everything with no strings attached, and let them find their own way through. Of course, most parents fall somewhere within that range, but it’s important to consider it in advance.

4) What if your children move to the US?

As a final point, if your child moves to the US from another country, maybe to live with a guardian, then matters can become more complicated. Tax and legal issues can significantly erode the value of the inheritance, so if this is a possibility it’s important to seek expert advice while drawing up your legacy plans.

Bringing up children is an awesome responsibility, and it doesn’t stop when you pass away. Putting solid legacy planning in place will ensure your care lives on after you.



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Coast Capital Savings Federal Credit Union provides advice and service related to deposit, loan and mortgage products. Coast Capital Wealth Management Ltd provides investment and financial planning services. Coast Capital Financial Management Ltd. provides advice and service related to segregated funds, annuities and life insurance products. Worldsource Financial Management Inc. provides advice and service relating to mutual funds.

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