"How can my minor children receive their inheritance?"

"How can my minor children receive their inheritance?"

Solicitor Sophie Forsyth explains...

"Like many people across the country, I ended the Jubilee bank holiday weekend by watching the Britain’s Got Talent final on Sunday night. As the top two acts awaited the announcement of the winner, the lawyer in me wondered how ITV would deal with the £250,000 prize money if 13-year-old Jamie Leahy were to win."

The law states that people under the age of 18 and those lacking mental capacity cannot provide ‘good receipt’ for monies, meaning that Executors make a risky decision if they give the child their entitlement under a Will (or intestacy) directly.

The rule regarding under 18s may seem too restrictive in this day and age – after all, many older children and teenagers now have their own bank accounts, so transfer to their account should surely meet the requirements to confirm that they have received the money?

Unfortunately the law has not evolved with the times and so whilst that might practically work, if there is ever a question about receipt of the monies then Executors risk personal liability for not paying the money in the correct manner. It could be a very costly decision!

So how can we pay the money?

The main ways to get around this problem are as follows:

  1. The Executor or Administrator can look after the money for the child until they reach the correct age. This is called being “held on trust” and essentially means that they are the caretaker for the money until the child is old enough to receive it directly.

  2. The Executor or Administrator can appoint a new person to look after the money for the child (called a “Trustee”). This is usually at least one of the child’s parents for administrative ease, but it can be anyone who is over 18.

  3. If the child is 16 or older, sometimes they are allowed to receive the money outright despite the fact that they are still a child in the eyes of the law. You should check the wording of the Will to see if this applies.

  4. Sometimes there is provision in the Will to pay the money to the parent of the child, to look after for the child. This is similar to the “Trustee” role set out at number 2.

You should be aware that there are strict rules regarding trusts, including the new registration rules and potential tax liabilities on the money held on trust, and so you should always seek advice if a child is a beneficiary of a Will to ensure that you do not face personal liability for anything you do or don’t do.

Our expert solicitors at Lawson-West can provide advice on your obligations and the best way to deal with the gift based on your specific circumstances.

Please get in touch for further information 0116 212 1000

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