When a parent or grandparent dies and leaves something to a child under 18, most families assume the money simply sits safely until the child comes of age. What actually happens is more specific, and more restrictive, than most people expect. Unless a will directs otherwise, a minor’s inheritance in South Africa is paid into the Guardian’s Fund, a government-administered fund controlled by the Master of the High Court, and it stays there under conditions the family has very little say over.
This blog explains what the Guardian’s Fund is, when a minor’s inheritance ends up there, how the fund actually operates, and why so many estate planning attorneys, including Executor Law, encourage parents to plan around it rather than leave things to default.
What Is the Guardian’s Fund?
The Guardian’s Fund is established under the Administration of Estates Act 66 of 1965 and is administered by the Master of the High Court through the various Master’s Offices around the country.
It exists to hold and protect money due to individuals who cannot yet manage it themselves, most commonly minors, but also missing or unknown heirs, and certain other classes of persons under legal disability.
When an executor winds up a deceased estate and a minor is entitled to a cash inheritance, the executor cannot simply pay that money to the child or hand it to a parent to hold on the child’s behalf. Unless the will provides for a different arrangement, usually a testamentary trust, the executor is legally required to pay the minor’s share into the Guardian’s Fund.
The money is invested by the state, and the child cannot access it until they turn 18, subject to certain exceptions discussed below.
When Does a Minor’s Inheritance Go Into the Guardian’s Fund?
A minor’s inheritance is directed to the Guardian’s Fund in two common scenarios.
The first is intestate succession. If a parent dies without a valid will, the estate is distributed according to the Intestate Succession Act 81 of 1987. Where a minor child is a beneficiary under this formula, their share is paid into the Guardian’s Fund by default, because there is no will to direct it anywhere else.
The second is a will that names a minor as a beneficiary but does not include a testamentary trust clause. Many parents draft a will leaving assets to their children without specifying how a minor’s share should be managed if they are still under 18 at the time of death.
Without that instruction, the executor has no choice but to pay the inheritance into the Guardian’s Fund, even though the parent had a valid will.
How the Guardian’s Fund Works Day to Day
Once a minor’s inheritance is paid into the Guardian’s Fund, several things follow.
The funds are invested by the Guardian’s Fund itself and earn interest at a rate set by the state, which in practice tends to be modest compared to what a professionally managed investment portfolio could achieve over the same period.
The money is held in the child’s name but is not accessible to the child, a parent, or a guardian without a formal application. A parent or legal guardian who wants to draw funds from the Guardian’s Fund for the child’s maintenance, education, or medical costs must apply to the Master of the High Court, motivate the need in writing, and often provide supporting documentation such as invoices, school fee statements, or medical quotes.
These applications are not instant. Processing times vary between Master’s Offices and depend heavily on the completeness of the application and the current workload of the office handling it. Given the broader economic conditions currently affecting state owned entities and public sector capacity in South Africa, Master’s Offices are not immune to these constraints, and it is not unusual for a family to submit an application and wait several weeks before receiving a response. Families dealing with an urgent need, a school fee deadline, or an unexpected medical expense, often find the process slower than the situation demands.
When the child turns 18, the full remaining balance is paid out to them directly, in one lump sum, regardless of whether they are equipped to manage that amount of money responsibly at that exact age.
The Drawbacks of the Guardian’s Fund
The Guardian’s Fund exists for a good reason, and it does protect a minor’s inheritance from being misused or lost. But it comes with real limitations that most parents would not choose if they understood them clearly.
There is no flexibility in how the money is used while the child is a minor. A parent cannot simply use the funds as needed for the child’s upbringing without going through the Master’s application process each time.
The investment return is modest. Money held in the Guardian’s Fund is not actively managed for growth in the way a trust portfolio or unit trust investment could be, which means the real value of the inheritance can erode over time relative to inflation.
The lump sum payout at 18 removes any structure or staged access. A testator who wanted their child’s inheritance to support university fees, a first car, or a deposit on a home over several years has no way of directing that outcome through the Guardian’s Fund. The entire balance is simply released at once, to an 18 year old, with no conditions attached.
There is limited say for the family. The Master of the High Court, not the family, controls access to the funds throughout the child’s minority. For families who would rather a trusted relative or professional manage the inheritance directly, the Guardian’s Fund does not allow for that.
How to Access Guardian’s Fund Money During a Child’s Minority
A parent or legal guardian who needs to draw on a minor’s funds while they remain in the Guardian’s Fund must submit a formal application to the relevant Master’s Office.
The application typically needs to set out the amount required, the purpose of the withdrawal, and supporting proof such as quotations, invoices, or fee statements. The Master has discretion to approve, partially approve, or query the application, and there is no guarantee of a quick turnaround.
Families are generally advised to apply well in advance of the date the funds are actually needed, rather than waiting until an expense is due.
The Alternative: A Testamentary Trust
South African law gives testators a straightforward way to avoid the Guardian’s Fund entirely for their minor beneficiaries: including a testamentary trust clause in their will.
A testamentary trust is created by the will itself and only comes into existence on the testator’s death. Instead of a minor’s inheritance being paid to the Guardian’s Fund, it is paid into the trust, where it is managed by trustees the testator has chosen, according to terms the testator has set out in the will.
This structure gives the testator far more control than the Guardian’s Fund allows. The testator can specify what the funds may be used for during the child’s minority, such as school fees, medical costs, or general maintenance, without requiring a Master’s Office application each time. The testator can also decide at what age the child should receive the capital outright, whether that is 18, 21, 25, or in staggered portions at different ages, rather than accepting the automatic lump sum payout at 18 that the Guardian’s Fund applies.
Trustees appointed under a testamentary trust have a fiduciary duty to manage the funds prudently and in the child’s best interests, and can generally seek proper investment growth for the trust’s assets in a way that goes beyond what the Guardian’s Fund’s standard interest rate provides.
It is also worth noting that a testamentary trust is the most commonly used trust structure in South Africa, largely because it is straightforward and inexpensive to set up compared to other trust types. Rather than requiring a separately drafted and registered trust deed, a testamentary trust clause typically adds no more than a single extra page to the will itself.
Testamentary trusts also often benefit from more favourable tax treatment than other structures, and tend to be less costly to administer on an ongoing basis. For most parents, this makes a testamentary trust a practical and accessible option rather than a costly or complicated one.
Guardian’s Fund vs Testamentary Trust: The Key Differences
Control: The Guardian’s Fund is controlled by the Master of the High Court. A testamentary trust is controlled by trustees the testator chooses.
Access to funds: The Guardian’s Fund requires a formal application for every withdrawal during the child’s minority. A testamentary trust allows trustees to release funds according to the terms the testator set, without a government application process.
Payout at majority: The Guardian’s Fund pays out the full balance the moment the child turns 18. A testamentary trust can delay full access to a later age, or release the inheritance in stages, exactly as the testator directed.
Investment growth: The Guardian’s Fund pays a state-set interest rate. A testamentary trust can be invested more actively, subject to the trustees’ duties and the terms of the trust.
Setup: The Guardian’s Fund requires no planning at all, it applies by default. A testamentary trust must be deliberately included in the will while the testator is alive and has capacity to do so.
Give Your Children’s Inheritance More Than a Default
The Guardian’s Fund plays an important protective role in South African law, but it is rarely the outcome parents would choose if they understood the alternative. A properly drafted testamentary trust gives a testator real control over how, when, and under what conditions their children receive an inheritance, instead of leaving those decisions to a default legal mechanism.
Executor Law drafts wills and testamentary trusts for parents across South Africa, ensuring that a child’s inheritance is protected, managed sensibly, and released on terms the family actually intended.
Speak to a wills and estate planning specialist →
Frequently Asked Questions
What is the minimum amount that must be paid into the Guardian’s Fund?
There is no fixed statutory minimum that requires an amount to be paid to the Guardian’s Fund. In practice, executors are guided by the terms of the will and the specific circumstances of the estate, and it is common for even relatively modest inheritances to be directed there if no testamentary trust exists to receive them.
Can a parent simply refuse to let a minor’s inheritance go into the Guardian’s Fund?
No. If the will does not create a testamentary trust and the minor is entitled to a cash inheritance, the executor is legally obliged to pay it into the Guardian’s Fund. A parent cannot instruct the executor to pay the money to them directly instead.
Does the Guardian’s Fund apply to property, or only cash?
The Guardian’s Fund generally holds cash. Immovable property left to a minor is usually dealt with differently, often held in the minor’s name with a guardian or curator managing it, or structured through a trust, rather than being liquidated and paid into the fund.
How long does it take to get money out of the Guardian’s Fund for a child’s needs?
There is no fixed statutory timeframe, and processing speed depends on the specific Master’s Office and how complete the application is. Families should apply well before the funds are actually needed rather than waiting until an expense becomes urgent.
Is it too late to set up a testamentary trust if my will has already been signed?
No. A will can be amended or replaced at any time while the testator has the mental capacity to do so. Adding a testamentary trust clause simply requires updating the existing will with the assistance of an attorney.