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.

It doesn't, it can be any account.

But you need to bear in mind that income on accounts in your own name is subject to tax on YOUR tax status, not the child's. I'm holding £20k for my niece and my accountant said I had to show the interest on my tax return and pay tax on it (if due, it was in my case) myself. Which is quite annoying. I'm also holding c£20k of my mum's money, to pay costs until her house sells, and that's the same.

Why would he not give it to the mother to act in her children's best interests, by putting it into their savings accounts?

Does he have reason to believe their mother will not act as a responsible trustee for the money?

That's why my brother's will stated we could open accounts in his son's name. It should be possible to do that, even if it wasn't explicitly stated in the will.

The will doesn't allow for the mother to give valid receipt on behalf of her children. Its really basic

Im thinking since she is technically an executor the best thing sounds like it would be for SIL as one of the trustees to open junior isas for them and for DH to then transfer the money into the junior isas and just sit there. DH can't open the junior ISAs since it has to be a parent or grandparent.

SIL is wanting to buy a bigger house and wanted to use the money towards the deposit so we don't feel comfortable just handing the money to her (not that its technically any of my business)

Yes that wouldn't work since DH is a top rate tax payer

and we are definitely not paying tax on their money out of our own funds!

Im thinking since she is technically an executor

There's nothing technical about it. If she's not named in the will as an executor then she's not an executor.

It's really worrying that she wants to use it as a deposit. I would open a trust account for each child in their name (Trust for the benefit of...) and manage ot directly.

My DDs inherited when their gran died. Eldest two were 19 and 17 we just gave them their share youngest is 12 and we put hers in an isa in her name.

Does the will include the STEP standard administrative provisions? https://www.step.org/public-policy/step-standard-provisions
Most solicitor prepared wills would include this. cl 6 of the second ed (2011) or clause 5 of the third ed (2023) include a parental receipt clause.
if it’s not included, this may be helpful https://journal.step.org/step-journal-may-2014/receipt-minors
STEP is the main professional body for wills and probate solicitors. Solicitors can take an additional exams to become a member.

DS inherited from my dad when he was 12.

The solicitor dealing with the probate asked me if he had a bank account, I said yes and they sent a cheque made out to him which I had to acknowledge receipt of in writing.

So yes, under 18s definitely can receive the money!

DD was given some money by her grandmother. The funds went into an account Mr and Mrs Bouncydog in Trust for Miss Bouncydog, It earned interest but the interest was within the individual tax allowance so no tax was paid. This way in the event that Mr and Mrs Bouncydog had financial issues the funds were clearly ring fenced for the benefit of Miss Bouncydog.

No I mean that whilst DH is doing all the work SIL is actually an executor

But this will is extremely basic and doesn’t allow for a parent to give legal receipt

Neither did my dad's @bouncydog

It just contained a number of specific bequests (which included DS) then the split of residual to beneficiaries X, Y and Z.

I think his too was done by one of these online companies but it was a local reputable firm of solicitors who dealt with the probate and distribution of funds.

Yes, technically and legally you can. But for various logistical reasons I can't currently do that for my niece.

I thought it was worth letting people know the tax situation if they hold the money in their own names, I wasn't suggesting they should do that. Quite the opposite in fact.

Oh, and you don't need the will to say this in order to be able to do it, you can just do it.

I don't know what you mean by "give legal receipt", my mum's will doesn't say anything about that either. And it was properly done.

Sil is the mother and an executor. Just get her to sort it out. No she can't use it as a deposit, but she can open a trust account for the daughter and put the money in there.

My toddler inherited a significant 6 figure sum from my parents and I got none because it was deemed that I already had enough money as I had a very good job and mortgage paid off etc. It feels very weird knowing my pre-school age child already has enough cash to buy a pretty large house.

This. It's some to open an ISA for the DC but you will need a copy of their birth certificates if they don't have another bank account.

Thank you for your comments but this is really a technical legal question about the fact that the minor can't give legal receipt (i.e legally they haven't received it). The money has to be held on trust. If DH pays it into a normal account for the children then legally he could have to pay it to them again once they are 18.

As such the money needs to go into an account where they can't access it and where a trustee has some control.

I think the easiest thing is going to be to use ISAs and to take advantage of the fact that SIL is also an executor under the will (even though she isn't doing anything at the moment).

To everyone asking whether DH has read the will - yes of course he has.

Just to add to my previous post, the solicitor dealing with DM's will was happy to pay my daughter's inheritance into my current account. I simply had to sign a receipt (wording below). I, as the mother of the minor, then became responsible for holding the money for her and had she not then received it later, I would have been liable to pay it to her, not the other executor (I was also an executor so I think a similar situation to your DH and his sister).

I, [my name] as parent and guardian of [daughter's name] who was born on the [daughter's date of birth] ACKNOWLEDGE to have received from the Executors of the late [deceased's name] the total sum of £[enter figure] representing the amount due to her.

2. I UNDERSTAND that the above sum represents her final distribution of her share of the estate due to her held in trust for her contingent on her attaining the age of eighteen years under the terms of the Will of the said deceased.

3. I CONFIRM that I will hold these monies on trust for my said child contingent on her attaining the age of eighteen years.

[Sign and date]

Obviously your DH would need to keep a copy of the receipt just in case there were ever any issues.

An ISA with SIL as the trustee until the child is 18 would probably be the best option but I don't think that is something your DH needs to worry about, unless he has reason to distrust his DSis.

(Edited to add clarification)

Thank you that is very helpful

Must go into an account in their name with an adult acting as signatory until they permitted to sign any transactions themselves

Because it wasn't left to the mother

It’s the other way around. The law says the trustee can give legal receipt. The will would have to say he/she can’t.