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13 May 2026 - Most parents assume that leaving money to their children is enough to secure their future. In reality, how an inheritance is structured matters just as much as what is left behind. Without careful planning, children can be left financially vulnerable not because of a lack of assets, but because of how those assets are managed in a parent's absence. By Paul Makube, Senior Agricultural Economist, FNB Commercial
These issues often surface when families are already dealing with loss and uncertainty. This is where thoughtful estate structuring and long-term fiduciary oversight can play a crucial role in protecting children's interests over time.
In cases where children are nominated as beneficiaries on life insurance policies, the risk is particularly pronounced. Without a suitable structure in place, policy proceeds intended to provide long-term security may be locked into state-administered mechanisms or managed without specialist oversight. FNB's Minor Beneficiary Trusts offer a practical solution, allowing life insurance payouts to be professionally administered on behalf of minor beneficiaries, ensuring funds are applied responsibly towards education, living expenses, and ongoing care as a child grows.
"The biggest risk to a child's inheritance is not always how much money is left behind, but how it is structured," says Johan Strydom, Product Head at FNB Fiduciary. "Well-intentioned decisions can create long-term financial challenges for children if the right estate planning mechanisms are not in place."
Here are five common ways inheritances are put at risk - often without parents realising it:
What this means for parents
While testamentary trusts are one option, structures such as the Minor Beneficiary Trust are particularly relevant where life insurance proceeds or smaller inheritances need to be protected and administered for children over time without the complexity of broader estate structures. Protecting a child's inheritance is not about having more money it's about making informed decisions.
