Can money be paid to a beneficiary of a will if they are under 18?

[user989]

Does anyone know? I'm struggling to work out the answer.

DH is the executor of his aunts estate. Aunt never married and so various family members share her estate. It wasn't massive but the great nieces and nephews all get around £11k each.

Three of them are under 18. In this case I think the money has to be kept until they are 18. Their mother however wants to take the money and keep it for them.

There is nothing in the will that says that she can give legal receipt for the money on their behalf.

I think the money has to stay where it is until they are 18? Or does it have to be put into separate accounts for each of them? Or even invested for them?

Realistically DH doesn't want the hassle of having to manage this. It is not something he is really equipped to be dealing with at the moment since he has health issues and is dealing with a number of different things. He is struggling to manage his own affairs let alone to have to manage financial matters for three minors for the next 12 years. Just dealing with the probate/house etc has been a significant amount of stress for him.

I'm not sure on the legal rules, but a sensible choice that would remove your DHs responsibility but protect the money is putting it into a child ISA which can't be accessed until 18 for each child.

Can't he just get a cheque made out to each recipient? I know cheques are old-hat, but surely the bank which holds the executor's account can do this. Then their parents will need to pay the money into an account in their name. And the Aunt's wishes are being carried out.

I inherited from my GPs before I was 18 (I was probably 15/16 I think), and the money just came directly to me. I put it in my savings, and put it towards my first car a few years later. It was in the low thousands, IIRC.

There's a risk there that it could be put into an accessible account and used by the parents.
MiL did that to DH and SiL as children.

I don't think it can be paid to under 18s.

It can be paid to another adult (their mother) who needs to sign a receipt to say she's holding it for them until they are 18. There are probably forms online for this.

My DM's will was managed by a solicitor. I had to hold my daughter's inheritance for her since she was only 17 years and 11 months (!) when it was distributed.

Bit surprised the will doesn't name a trustee for the children - has he checked? In the absence of that, usually it would be the executor. But all you have to do is put it in an account in their name that they can access at 18.

£11k is probably not enough to invest and certainly not enough to set up a formal trust. But it partly depends how old the kids are - as in, how long would it be for?

The answer to your question is no, under 18s cannot receive an inheritance, it has to be kept "in trust" until they turn 18. This means someone needs to be formally appointed as trustee to oversee the money until that point. It can be a solicitor so if it's too much for your DH he needs to approach one. It's not usually a complex role however - it can just mean putting the money in a decent savings account and ensuring no one touches it.

@BuzzieLittleBee that was technically illegal if you were in England, not that it sounds like it mattered.

There is nothing in the will about their parent being able to give legal receipt for the money.

The will is crap. It was drafted by co-op legal services and it is so short that it literally could have been drafted on the back of a fag packet

This creates a de facto trust. In my experience solicitors are perfectly happy to pay the funds to the parents for safekeeping.

Have you gone through probate yet and had the will accepted?

@user989

When I was executor to my Dad's estate last year, we had this issue.

The solicitor would pay the money into a dedicated account in the child's name or to the executors.

It was less money per child than what you are dealing with, so I had the money for my child as I had an account for them, and the other executor had the money for their grandchildren as they had accounts for them.

I asked if I could put it in premium bonds for them, and the solicitor said this was okay.

My Dad's will did say they could have the money at 18 years old, though, so it might be different if no ages are mentioned.

One thing to have in mind is that if a child of under 18 who has inherited dies, the money has to go back into the estate - I was shocked about this when the solicitor said this.

Interesting. Maybe it was paid to my parents and they gave it to me. It was over 30 years ago, so I don't remember the details. I just remember having some money and my parents saying I could do what I wanted with it, but that I should think about how to spend it, as it was a 'one off' and it would be worth doing something with it that I'd remember. (ie - don't fritter it away). I was a very sensible teenager, so the chances of me doing something daft with it were next to zero!

Largely following on from my older brother who at the time was the executor of my will, I wrote mine so my children would not inherit the money until they were 26 and allowed the trustees to advance money for their 'education or benefit' should they choose to do so

My Nan has just died and DM is going to pay the grandchildren's inheritance directly into their ISAs. It's nowhere near enough to be wasting it on Trust fees.

@TooManyNiblings there are no fees, it's not that kind of trust. It just means a trustee is nominated to look after the money on the child's behalf. That could be you in this case, you would just need to put the money in a savings account and make sure no one touches it until the children turn 18.

Do you trust that their mother wouldn't spend it? My mother emptied my DS and I savings accounts when we were younger. Things were tight ,I understood, but my DS never has.
Both my DC have child ISA which is in their names to access at 18yrs old. I don't want to be in the position of holding the money.

It needs to be placed in trust for them. There needs to be a trustee who looks after the trust fund until they are 18. This doesn't have to be anything specific though. Do you trust their mother? If you pay it to her and she signs to say she's accepted it and sticks it in an ISA for them that's fine. If you think their mother would spend the lot on fags and booze over the years, vaguely give it to her, and don't know where it's gone, you could be in trouble. If you actually don't trust mum, get your DH to open an account for the kids and stick in there. A high interest ISA would be good and the money could just sit there until the kids turn 18.

can DH appoint SIL to be the trustee? DH and SIL are actually technically joint executors of the will but she is useless and hasn't done anything. However its her kids and it would be better if she was the trustee

yes.

Ok looked some more at a few websites. Could DH get SIL to open junior visas for the children and then appoint her as trustee and then put the money into the Isa - some now and then some in the new tax year in april?

Could he then just say his job is done since SIL would be the trustee and the money cant be accessed un til they are 18? Does the trust need registering if its a junior isa?

Look at something like the Harpenden Building Society Club 18 Account. The money gets some interest but can only be accessed by the child at 18. So no work required once opened.

Im not sure whether it has to be a specific trustee account

That doesn't work though, trusts can be ended by the beneficiaries as soon as they are all 18.

Yes, but he doesn't need to "appoint" her if she is executor, she has joint responsibility for it.

Some impartial advice from The Gazette which is the legal declaration of pills etc.

https://www.thegazette.co.uk/all-notices/content/103941

The money needs to go into an account managed by the estate until the child is 18.

You can appoint SIL to be the trustee, but if the money goes to her directly to invest, you have to be confident she will invest it accordingly.

As executor, I would set up a Junior ISA for each child and pay the money directly into the accounts. The money can't be touched until they are 18 and it can't be touched by anyone else. The child can manage the ISA themselves once they're 16 but can't take the money out till they're 18.

If your DH can't set up the Junior ISA directly, then he can set up a savings account in their names and put the money there. Then as each child turns 18, he can pay out to the child.