What happens if a beneficiary of a will is under 18?
Posted on 9th June 2021
Our expert Wills and Probate solicitors discuss the legality behind naming a minor as a beneficiary on a will.
The majority of parents wish to name their children as the beneficiary of their wills after they have died. Still, for adults who have wills drafted and whose children are still under the age of eighteen, this could require further action and clarification. In this post, our expert wills and probate solicitors will run through what it means to set up a beneficiary of your will, and what the process is for naming a minor as a beneficiary.
Who is a beneficiary?
A beneficiary is somebody who inherits under a person's Will (or, where the deceased did not leave a Will, under the rules of intestacy). A gift in a Will is only effective upon the testator's death; a will is ambulatory in nature, meaning that it may be changed or revoked (provided the testator has testamentary capacity) at any time during his or her lifetime.
Can I name a minor as a beneficiary of my will?
A common reason for making a Will is for parents to make provision for their minor children. Minors cannot own or hold property in their own name and this may cause practical problems for executors. Unless the Will states otherwise, a minor will be entitled to their inheritance at the age of 18. Most clients consider this to be a little too young; many preferring to raise the age to, say 21.
What is the role of a Trustee?
Until the minor beneficiary reaches 18 (or the age stated in the Will), their money is held by Trustees. It is usually convenient to appoint the same people as executors and trustees, although if you prefer, you may appoint separate executors and trustees. The key thing to remember is that whenever there is a minor beneficiary, a minimum of 2 Trustees are required.
During the child’s minority, the Trustees have power under statute to apply the trust income for the benefit of the minor and power to advance capital. These powers are provided under s31 and s32 Trustee Act 1925. The powers were widened by Inheritance and Trustees’ Powers Act 2014. Further, the testator may also leave a ‘letter of wishes’ offering guidance to the Trustees as to the circumstances in which they would wish money to be applied during the child’s minority. Such a letter is of course only a guide to the Trustees and is not legally binding upon them.
Here at MG Legal, we would suggest that if you have children under the age of 18, you take time to consider who you would wish to appoint as Trustees in your Will. It may be that you would wish to appoint the same people that you have appointed as testamentary guardians for your children however, if so, you should bear in mind that although the guardian may be the person best placed to assess the needs of the child, if they are also appointed as trustee there can be a conflict of interest. We would suggest that if you wish to appoint a guardian as trustee, it is advisable to consider appointing at least one independent trustee to act alongside them.
If you would like to discuss making or updating your Will, contact our team at your local office in Lancaster, Longridge or Garstang for the Preston area. We will be happy to discuss your matter with you and confirm our legal fees for assisting you.
What is the legal process, and how can MG Legal help?
The legal process for setting up a minor as a beneficiary to your estate in your will requires some additional action. Most written wills will include STEP Standard Provisions, and if you choose to enlist MG Legal to help with the drafting of your will then we will ensure that this is all done correctly. These provisions give permission to trustees to use powers of advancement if necessary to prolong the terms under which the money or gift is held in trust. If this is not the case, then the beneficiary will automatically be entitled to their share of the estate as soon as they reach eighteen.
If you want to discuss making or updating a Will, applications for probate after your loved one has died, or whether you can dispute a Will, contact our team at your local office in Lancaster, Longridge, or Garstang for the Preston area. We can discuss your matter with you and confirm our legal fees for assisting you.
Alternatively, email email@example.com and a member of the team will contact you within one working hour to discuss your enquiry.
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