will beneficiary under 18

kitbit

I wonder if somebody can help with how to write a will to include leaving cash to under 18s.

An elderly friend of the family wants to leave whatever cash she has left to my nephews who are both under 18. She has bought a will kit but none of the forms fit. She does not want to pay a solicitor to write a will as she does not have very much cash.

Her estate will be very simple as she lives in rented accommodation and has less than £5000 in cash. The guide to the will kit refers to small gifts of up to £500 to minors. There would be a bit more than this but nothing substantial. With the level of cash she has, she does not want the cost of setting up a trust.

She has made it perfectly clear to everybody that this is what she wants and she has no family who could contest the will.

If she had in her will that the residue is paid in equal portions to the two boys, will this be legal? Who is going to argue with it for this amount?

Tuesday_Tenor

The trouble is, I don't believe the children CAN inherit until they are aged 18. (Or older if so specified). So someone has to look after the money for them until they are 18. So a Trust needs to be set up, where a Trustee has certain legal responsibilities to protect and try to maximise the return for the minor while the money is held in trust.

Googling 'leaving money to a minor' doesn't provide any other suggestions.

I can understand why with the sums of money involved the testator doesn't want to incur fees. Possibly if the scenario is very simple, the cost may not be very great? I would prefer to spend £200 (??) on the solicitor to ensure that it is done properly, than risk the problems below.

The only other 'homegrown' option I can see is to rely on 'trust' in the everyday sense of the word. She leaves the money to an 'of age' individual she trusts to gift it to the children or hold it for them until 18. (She could also write letters to everyone concerned that this money is intended for the boys).

There are several scenarios where there could be problems with this:
- if the adult gifts the money, the adult may have IHT implications from gifting out of their capital (if, that is, they should they die within 7 years and their estate be over/close to the IHT threshold)
- if the adult holding the money dies in the meantime, it actually forms part of their estate .
- if the adult holding the money gets divorced, again it's part of his/her assets that could be claimed by the other party in the divorce settlement.

That's why it really needs to be done properly, in a Trust in the boys' names!

Hope someone with more knowledge can help.

nom_de_plume

Would something as simple as stating that the cash perhaps be invested in premium bonds work? That way the instruction for how the money is to be held is clearly defined and minors cannot control the bonds until they are aged 18 if my memory serves me correctly.

CKhalvashi

When my grandmother died, there was money to be given to my girls.

This was done under Georgian law, but I believe children under 18 can inherit and be given the money (I've put it into my childrens' jISAs over the next 4 years, and part is held in cash).

This isn't relevant in this situation, but the property element is currently tenanted, and the money being split between them, having Georgian tax (and English tax, should it become necessary, but not yet as Georgian tax is 5%) being paid on it.

CK

dzug1

A trust is automatically formed just by the bequest in the will, with the executor as trustee.

You don't need a separate expensive trust document for small sums like these. The executor would buy a suitable investment in the kid's names and hand it or the cash over when they are 18.

Savings certificates are one possibility - no income tax for anyone to worry about. Premium bonds maybe not that good an idea

peachyprice

It's really quite simple, there's no need for a Trust in the legal sense to be set up, the executor just has to put the money into a accounts in the children's names that cannot be accessed until they are 18, or by anyone else.

So all she has to do is write in her will the amount she wishes to leave to them, the executor does the rest when she dies, when they turn 18 they get the money. What the executor musn't do is give the cash to parents/relatives to 'look after' or to put in account with them acting 'on behalf' of the children.

kitbit

Aaah! just spent ages typing a reply and it lost it somehow. Just checking this is going to post

kitbit

Thanks for the replies

Peachyprice I am glad it can be as simple as that.

The will kit includes a form for leaving residue to children but this is meaning the children of the person who has died. The wording is:-

I direct my trustees to pay, convey and make over the residue of my estate equally between or among or wholly to such of my children as survive the coming into operation of this clause, and have attained or thereafter attain the age of () years complete, along with the issue who do so survive and attain the said age of any of my children who may fail to so survive or do so survive but fail to attain the said age, such issue taking equally between or among them "per stirpes" if more than one the share of residue, original and accrescing, such as the parent would have taken on survivance

If this worded to say

I direct my trustees to pay, convey and make over the residue of my estate equally between x and y or wholly to such of these beneficiaries (is this the right word to use here?) as survive the coming into operation of this clause, and have attained or thereafter attain the age of () years complete, etc as above.

Does this mean that if both are alive, they each receive half, if one dies before her, the other gets everything, if one dies but has surviving children, the child(ren) get his share?

Assuming they are both still under 18 when she dies, the trustee would then need to invest the money until they reach that age (assuming she wants it to be 18). As the amounts are small, it probably wouldn't be worth doing anything other opening a bank account - so an account in each of their names that can't be touched by anyone until they reach that age - I take it banks do this?

getmore4less

simple solution(if parent trusted) make them executor.

Unless there is another person prepared to take on the job for free.

madbadrob

kitbit wrote: »

Thanks for the replies

Peachyprice I am glad it can be as simple as that.

The will kit includes a form for leaving residue to children but this is meaning the children of the person who has died. The wording is:-

I direct my trustees to pay, convey and make over the residue of my estate equally between or among or wholly to such of my children as survive the coming into operation of this clause, and have attained or thereafter attain the age of () years complete, along with the issue who do so survive and attain the said age of any of my children who may fail to so survive or do so survive but fail to attain the said age, such issue taking equally between or among them "per stirpes" if more than one the share of residue, original and accrescing, such as the parent would have taken on survivance

If this worded to say

I direct my trustees to pay, convey and make over the residue of my estate equally between x and y or wholly to such of these beneficiaries (is this the right word to use here?) as survive the coming into operation of this clause, and have attained or thereafter attain the age of () years complete, etc as above.

Does this mean that if both are alive, they each receive half, if one dies before her, the other gets everything, if one dies but has surviving children, the child(ren) get his share?

Assuming they are both still under 18 when she dies, the trustee would then need to invest the money until they reach that age (assuming she wants it to be 18). As the amounts are small, it probably wouldn't be worth doing anything other opening a bank account - so an account in each of their names that can't be touched by anyone until they reach that age - I take it banks do this?

The way you have worded the above would see the surviving child get everything if one died.

The way you would need to word it would be

I direct my trustees to pay, convey and make over the residue of my estate equally between x and y having obtained the age of (z). or to their children upon attaining the age of (z1) if they do not survive. If any do not survive and do not leave issue then that share should be given to the one surviving or the issue thereof upon having attained the age of (z2)

Please note this is not given from someone with legal knowledge but based on my experience of dealing with wills for a number of years. I would advise that the person should get a will of this nature professionally written so that no claim can be made to make the will invalid.

Rob

Prothet_of_Doom

Speaking as a grown adult with adult children. I wish my grand parents had left some of thier inheritance to Great Grand Children.

My parents inherited money in thier late 60's of which they have no real need, and are sitting on, 'for a rainy day' and yet their grand children (2 of mine and 2 of my oldest sister) are struggling to make a start in adult life.

In my parents will they leave it to Us, but we won't need it, and I certainly will pass on most of my share to my children, as soon as I get it, (as I won't need by then it), and if they have them their children.