How to leave money to minors in your will

[ChannellingZen]

I'm single, 40ish, no kids, flat with mortgage. Equity about £120k. I've not got a will.... yet!

I'm planning to get a will so that the estate will go to my three siblings and their kids rather than automatically back to my (comparatively wealthy) parents.

I'm getting really confused about leaving money to minors, Dr Google has failed me, so I thought I'd ask here.

My plan is 20% to each of my 3 siblings, then the 40% left to my 4 nieces/nephews - 10% each. For my niblings, 3 are minors (2 under 5, one 14), and one is 19. If any more came along, that 40% would be split further.

I spoke to my two sisters (who have the kids). One of them is really keen any money for their kids is put into trust until they are 25.

I want to do this if practical, but we're not talking a lot of money here so I' m conscious of the cost and admin burden of what trusts might entail. Like, tomorrow, each nibling would receive perhaps £10k after the house is sold, funeral blah blah. Not enormous really.

Do I set the trust up at the point I sort my will, or does it only get set up if needed? Am I causing a huge admin headache for my siblings, would they need to do it all?

I know really nothing about it! I am keen for everything to be as easy as possible, and preferably fairly cheap, as the chances of me dying in the next few years are really small (I hope!!!)

All advice very welcome - thank you!

Go and speak to an estate planner. You will have to pay them but they will do it properly.

The worry is that if you dont set uo a trust were you to die while the children were under 18 they could end up with a lot of money that they might not be able to handle.

Setting up a Trust would get around this problem and hopefully would never kick in.

I will end up using a professional (solicitor) to write the will so of course will get proper advice at that point. But I'm trying to understand how it works beforehand so I can really make the most of my time with them.

I'm concerned about the relative cost of trusts vs the fairly low asset value, whether it's a trade off worth doing?

I have no detailed understanding of what costs are involved now and/or later / how much faff they are to administer- any knowledge or experience shared I'd love to hear.

The only thing I know about trusts is my grandfather set one up about 20 years ago putting his house in trust to his daughters to try and avoid his estate being liable for IHT, but in the end he was below the threshold anyway. He spent thousands with an estate planning company setting up this dubious trust, and the whole family feel he was taken advantage of - it was never going to be much tax if any. It probably fell below because he spent so much on the advice (joking but only just!) So unfortunately my only experience of trusts is with a negative connotation!

Take a look at Can a Child Under 18 Inherit? A Guide to What You Need To Know

Trusts are extremely expensive and complicated to set up. Considering your young age and value of the estate I would just focus on the will and don't share the information with anyone else.

Thank you @tennissquare and @prh47bridge , really helpful thoughts to share and a decent link :)

My view might be

DONT PANIC

The Trust will only need to be set up if you die before the children reach whatever age and its unlikley BUT you do need to provide for what happens if this does happen

Simply naming them in your will, creates the legal basis for a bare trust for children, the parents can then set up child bank accounts / ISAs etc (which are automatically bare trusts). But they would be entitled to the money at 18. This is what my BIL did before he died and it has been very easy to administrate and we haven't needed solicitors involved. Due to his will being so basic there are no restrictions on the money - if as parents /trustees we think it would be in the kids interests to spend the money before 18 on them, eg on private education we would be able to do that legally. You may think that's a good or bad thing. I think if you're paying a solicitor for a will you can have more restrictions added.

I think a more complicated trust to tie it up until 25 is not worth you / them spending extra money on (I'm not sure if it would cost more). Hopefully it would not be needed due to your age. And in my opinion it's not large enough amounts of money to justify doing so (just over £10k per child). If your wealth grows a lot and the youngest children are still under 18 and you think it might be sensible you could change the will then.

Thank you both, @JohnofWessex and @SatsumaCat , I am definitely taking this on board and think you both have valid points which I'm inclined to agree with.

My instinct is the 'get it at 25' trust idea is probably not worth it, but I mindful of my sister's wishes for her kids. The 19 year old has already frittered away most of his (modest) government child trust fund thing that my sister saved into every month, so she was trying to put in place a mechanism where the kids need to be more mature. But even if they do spend it on silly trainers or whatever, we're not talking 'life changing' amounts so it would be a shame but not a disaster. And we all go through that lesson at some point on how easy it is to spend money, but once it's gone, it's a lot harder to earn back.

And of course, hopefully it's not needed at all. Just wary of needing to do things properly otherwise there would be no point and I could potentially make things harder than they need to be for everyone!

Thanks again :)