Can A Beneficiary Of A Will Be Under 18?

Summary

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. 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. 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. 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. If a beneficiary under 18 survives the person who wrote the will but dies before reaching 18, the inheritance set.

Key information

• 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.
• 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.
• 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.
• 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.
• 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.
• 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.
• 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.

Practical guidance

• Source: Can A Beneficiary Of A Will Be Under 18?

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