What steps should you take when leaving money to children who may not be capable of managing their entitlement?

Any minor inheriting a gift or share in an estate will become absolutely entitled to that interest at the age of 18, unless the will specifies otherwise.

Inheriting money at a young age can sometimes do more harm than good, and many clients would prefer to appoint trustees to manage an inheritance for a child beyond the age of 18.

There may be a number of reasons why a testator wishes to protect a child’s interest. If the child is emotionally vulnerable, or there are concerns that they may be or become negatively influenced by a third party, the testator may be minded to delay the payment of the entitlement. Similarly, a testator may have concerns where an inheritance is likely to be high in value and the child lacks the experience or commercial foresight to manage the assets.

It is possible for the will to include a provision requesting that the proposed gift or share in the estate is to be held on trust until the child reaches a specified age beyond 18 (often 21, 25 or 30).

Alternatively, the proposed interest could be held by the trustees in a discretionary trust, to be paid to the beneficiary at such time as the trustees believe is appropriate. With either option, until the beneficiary becomes entitled, the trustees are responsible for the management of the assets. They would be chosen by the testator and their appointment included in the will.

We can help you reach the right decision for you in light of your specific circumstances when you are making provisions for your children in your will.

Contact Anna Coleman to find out how we can help you, telephone 01227 763939.