Can A Beneficiary Of A Will Be Under 18?

sarah ryan
Sarah RyanAccount Manager @ Lawhive & Non-Practising Solicitor
Updated on 22nd April 2024

When you make a will, you say how you want your property and assets distributed after your death. The people who receive these assets are called beneficiaries.

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If you have dependents who are under 18 or want to leave assets to a loved one who is under 18 like a niece, nephew, grandchild, or family friend, you may be wondering if you can make them a beneficiary of your will.

In this article, we'll clarify the law on this important part of estate management and outline the available options.

Can a beneficiary of a will be under 18?

Individuals who are under 18 can be named as beneficiaries in a will. However, beneficiaries under 18 are considered to lack the capacity to manage assets left to them in a will.

As a result, while you can leave assets like money, property, or personal items to someone who is under 18 in your will, they can't accept them until they reach 18. Before then, special arrangements must be made to manage the inheritance on their behalf. This involves appointing a trustee or guardian who will be responsible for managing and safeguarding the assets until the beneficiary comes of age.

If you're leaving assets to a minor, you can include a letter of wishes alongside your will to guide on how the funds should be managed or used for the beneficiaries' benefit.

What happens if I leave assets to a child in my will?

If you leave assets to a child or children who are under 18 in your will, the assets are placed in trust and you will have to name trustees to look after these assets until the minor child turns 18 or reaches a certain age specified in your will. If no trustee is named, the court may appoint a guardian to take on this responsibility.

Can a beneficiary be under 18 if there is no will?

If someone dies without a will, assets are distributed under the rules of intestacy. If, according to those rules, the primary beneficiary is under 18, then an automatic trust (known as a bare trust) will be put into place until they reach the age of 18.

What happens if a minor beneficiary does not live until 18 or the age specified in the will?

If a beneficiary under 18 survives the person who wrote the will but dies before reaching 18, the inheritance set aside for them will be considered part of their estate and distributed according to intestacy laws.

On the other hand, if the will specifies that a beneficiary should receive their inheritance when they reach a certain age (known as a contingency trust), and that beneficiary dies before reaching that age, their share or asset would typically pass to an alternate beneficiary named in the will, or it may become part of the residuary estate.

Should you set up a trust for minors in your will?

You don't have to set up a trust for a minor before making a will, but you can if you want to.

Usually, wills include the STEP Standard Provisions, granting trustees the authority to use advancement and maintenance powers for minor beneficiaries before they inherit, along with investment powers.

If the STEP Standard Provisions aren't included, the statutory powers outlined in Sections 31 and 32 of the Trustee Act 1925 kick in. These provisions ensure the minor's needs are met while the funds remain in the trust. If the age at which the minor is entitled to the gift or estate share is over 18, the minor automatically gains entitlement to the income at age 18.

How should a minor child's inheritance be managed in a will?

When a minor is named as a beneficiary, their inheritance is held in trust until they're old enough to manage it themselves.

The trustee or guardian overseeing the trust must make smart investment choices to grow and protect the assets over time. This could mean investing in stocks, bonds, or other suitable options.

Decisions about how the trust's money is used must benefit the minor, covering things like education, healthcare, and general welfare. However, the trustee can't spend the money however they like. They must follow the instructions laid out in the will and always act in the minor's best interests.

As a trustee, they're also responsible for keeping detailed records of how the money is spent and providing an annual account of these expenses. This ensures transparency and accountability.

Once the beneficiary reaches the age specified in the will, usually 18, the trustee transfers the assets to them, bringing the trust to an end.

What can beneficiaries under 18 inherit?

Minors can inherit a variety of assets, including money, property, investments, and personal items. However, they can't manage or access these assets until they reach 18 or the age specified in the will.

For instance, if a minor inherits property, trustees or a legal guardian will handle it. They'll manage rental income, maintain the property, and handle taxes and expenses. Similarly, if they inherit money or shares, trustees may invest and use the funds for the minor's benefit.

Even businesses like pubs or shops, which sell age-restricted products, can be inherited by minors. However, they can't manage or operate them until they're legally allowed based on age restrictions.

Items like jewellery, art, or collectibles are also managed by trustees or guardians. They'll decide on storage, maintenance, or sale based on what's best for the minor's interests and any instructions in the will.

How does a beneficiary receive their inheritance when they turn 18?

When a minor reaches 18, the trustee of their inheritance trust will review the trust terms to confirm when the beneficiary can access their assets. While 18 is common, some trusts may specify a later age.

The trustee prepares for the transfer by ensuring all investments are liquidated if needed and accounts are in order. Once ready, assets are transferred to the beneficiary, such as money in a bank account, property deeds, or shares in a brokerage account. After the transfer, the trustee finalises tax matters and closes the trust.

If the inheritance is managed by a guardian, their role typically ends at 18. They arrange asset transfers to the now-adult beneficiary, including access to bank accounts and property deeds. A final accounting may be required, showing how assets were managed during guardianship.

Can payments be made to minor beneficiaries before they turn 18?

Typically, payments to minors are made through their legal guardians or trustees appointed in the will. Minors themselves can't legally provide a valid receipt, so payments must be made to their guardians or trustees, who then manage the funds on behalf of the minor until they reach the age of majority.

However, if the will specifies a later age for the beneficiary to receive their inheritance, such as 21 or 25, then payments can only be made to them after they reach that specified age.

Trustees may have the power to advance payments to minors, but it is wise to seek legal advice before doing so to ensure compliance with all legal requirements.

Make a will with Lawhive

Whether you're planning your estate, setting up a trust for a minor, or need legal advice as a trustee about minor beneficiaries of a will, our network of specialist lawyers is here to help quickly and affordably.

Contact our legal assessment team today for a free case evaluation and fixed fee quote to get started.

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