Estate Administration: Will states age 21 for a beneficiary - is this mandatory?

CalvinHobs

My partner died in late 2023 and I am executor of her estate. I have Grant of Probate and am planning to make an interim distribution of the estate.

For one beneficiary of a pecuniary gift of £10K, the will states "... upon attaining the age of 21".

The beneficiary in question has just turned 20 and is very level headed i.e. they would put the cash into a savings account rather than go out on a spending spree.

As executor, am I bound to hold the gift in Trust until the beneficiary reaches 21? Or, because they  are over 18, can I use my discretion to pay it before then?

Mark_d

I would follow what is written in the will and put the gift in trust.  You would likely get away with giving the £10k to the 20 year old but you should really do what your late partner wanted.

Rodders53

AIUI.

Over 18 in England, they are an adult.

Even if you intend to keep this money as a simple bare trust, you as the Trustee, must inform the beneficiary of the trust's existence, and if they ask for the money you must give it to them once they are adult (over 18).

So you must tell them.  It isn't at your discretion not too.

But seek legal advice, from a STEP qualified solicitor ideally, if you want to be sure.  

From what you say of the beneficiary, then talk to them about a LISA or similar investment strategy your partner would maybe have approved for them?

Keep_pedalling

If this is an absolute gift rather than a conditional gift (one that states an alternative beneficiary if they fail to reach the age of 21) then they are entitled to their inheritance from the age of 18 so you can give them their money now. 

CalvinHobs

Thank-you for your replies. Yes, it is an absolute gift.

Today, I discussed this with the beneficiary and we agreed to a compromise: They will open a fixed rate 1 year ISA bond and I will transfer their gift into it. So the money will be in their name - but they will not have access to it until they are 21.

This will comply with the intention of my partner's wishes without having to set up a trust.

Notepad_Phil

CalvinHobs said:

... They will open a fixed rate 1 year ISA bond and I will transfer their gift into it. ...

My understanding was that with ISAs that only the account holder could transfer money into an ISA account, so if that is right then either you'll need to pass them the money and they add it to the ISA, or you would need to look for a non-ISA fixed account that will allow third parties to transfer money in.

CalvinHobs

Notepad_Phil said:

CalvinHobs said:

... They will open a fixed rate 1 year ISA bond and I will transfer their gift into it. ...

My understanding was that with ISAs that only the account holder could transfer money into an ISA account, so if that is right then either you'll need to pass them the money and they add it to the ISA, or you would need to look for a non-ISA fixed account that will allow third parties to transfer money in.

Ah... okay, thanks. The beneficiary also wishes to comply with the intent of the will - so the first of your suggestions should be fine.

Marcon

Mark_d said:

I would follow what is written in the will and put the gift in trust.  You would likely get away with giving the £10k to the 20 year old but you should really do what your late partner wanted.

Not an option if it's a bare trust, as seems to be the case. It isn't a case of 'getting away with it', so much as the doing what the law requires, as opposed to what the partner wanted. If the will didn't set up some sort of discretionary trust, the executor can't just decide to set one up.

Very glad to see from the later posts that a happy compromise has been reached!

artyboy

CalvinHobs said:

Thank-you for your replies. Yes, it is an absolute gift.

Today, I discussed this with the beneficiary and we agreed to a compromise: They will open a fixed rate 1 year ISA bond and I will transfer their gift into it. So the money will be in their name - but they will not have access to it until they are 21.

This will comply with the intention of my partner's wishes without having to set up a trust.

Although with ISAs, the rules mean you can always have access to it, even if it's a fixed rate (albeit with a penalty for early withdrawal). Possibly a moot point if everyone is intending to play nicely here, but the money is certainly not locked away out of reach.