It is possible to leave a legacy of money or personal property (i.e. not land) to a child under 18. This can be done in a number of ways, depending on whether you want to specifically name the children in question and when you want them to have access to the gift.
By name
If you want to make a gift in your Will to a child, you can do so by referring specifically to the child by name. For example, ‘I give £25,000 to my daughter Anna Smith’.
By description
If you want to leave a legacy (a sum of money or a particular item) or your residuary estate to your children, you may not want to name them individually in your Will.
Instead, you can use general words so that no child is named specifically and children born in the future are also included without the need to amend your Will. For example, ‘I give £25,000 to each of my children’.
It is important to understand who is included in the term ‘children’ for the purposes of a Will. Does it include adopted children, step-children, illegitimate children?
The best way of avoiding uncertainty is, of course, for your Will to specify exactly who is included in the definition of children. But if there isn’t a definition, the law applies to give us the answer.
For Wills made today, the following are included:
legitimate children – parents married at time of birth;
illegitimate children – parents not married at time of birth;
legitimated children – parents not married at time of birth but do so later; and
adopted children.
It is possible to exclude certain categories from the definition of children in your Will, but this is becoming less common. In any case, such children might have a claim on your estate in certain circumstances. For example, if a father had supported an illegitimate child in his lifetime, the child might have a claim to provision out of the estate.
Step-children are not automatically included within the meaning of children in a Will unless the step-parent has adopted the child or the Will specifically states that they are included.
Different rules apply to older Wills (particularly ones made before 1988). These rules can lead to complicated issues, and further advice should be sought to establish the true meaning of a Will made that long ago.
Age restrictions
If children are under the age of 18, they cannot legally inherit money – yet. A minor cannot give a valid receipt for a legacy unless there is a special clause in your Will allowing children over 16 to give receipt. For more information, see below.
Your Will may also specify that the beneficiary should not receive the legacy until they reach an age which is greater than 18. Common alternatives are 21, 25 or some other life event.
Outright gift or in trust?
The law imposes a trust on a legacy to a minor, so your Executors cannot simply pay over the legacy to them. It is held on trust and must be invested for them until they are entitled to take possession of it. But that does not mean that they can never see any benefit of it until they are 18.
If a legacy in your Will is expressed as taking effect on the child’s attaining 18, it is called a ‘vested legacy’. This means that:
The legacy is part of that child’s property, even though they are not able to hold it. If the child were to die before reaching 18, the original legacy is part of their estate.
Income from the investment of the legacy is added to the legacy.
Before the child reaches 18, the Trustees may pay money out of the interest on the investment, if they think it is appropriate for the benefit, education or maintenance of the child.
Exceptionally, up to half of the capital sum invested may be paid over for the benefit of the child.
If the legacy in your Will is expressed as taking effect ‘if and when the child attains 18’, it is known as a ‘contingent legacy’ and only takes effect if the child reaches the age of 18. This means that:
If the child were to die before reaching 18, the legacy to them lapses, and forms part of your estate.
The income from investment is not added to the legacy, but goes back into your estate.
Receipt by minors
A parent or Guardian can generally give a valid receipt to the personal representatives for any gift left to a child under 18. It is sensible to make specific provision for that in your Will if any of the intended beneficiaries are minors.
It is also possible for your Will to contain a provision stating that a minor, from the age of 16, is able to give a valid receipt.