AT WHAT AGE SHOULD MY CHILDREN RECEIVE THEIR INHERITANCE?

Many parents worry about the consequences of leaving significant amounts of money to their children in their Will. With preparation for a child’s future often being the focal point of a Will, concerns of maturity and responsibility are not uncommon. While your child will not receive any money before reaching 18 years of age – being the legal age of inheritance – it is still reasonable to feel uncertain about the amount of money they eventually will have access to. 

However, if prepared correctly, your Will can provide that your child receives their inheritance at an age of your choosing. 

Setting a Minimum Age

As per the case of Saunder v Vautier, if a beneficiary in a Will is over 18 years of age, and there are no additional factors to consider (e.g. concerns as to capacity or bankruptcy), then they can  challenge any clause preventing them from receiving their inheritance until a later date.

However, in your Will you may specify an age (18 being the youngest) at which you would like your child to receive their inheritance. By designating such an age, your child must reach that age before they can obtain their inheritance. If you are taking this route, it is also prudent to include a back-up provision in case they do not reach the specified age. 

In the meantime, your child’s inheritance will be held on trust for them. Your appointed executor will have the responsibility of managing the money by placing it in an interest-accruing bank account or even investing it. 

What is the Appropriate Age?

The appropriate age for a beneficiary to access their inheritance depends on your own preference and the beneficiary themselves – there is no particular age that qualifies a person to manage large amounts of money. In deciding at what age your children should obtain their inheritance, you may consider the following questions:

1. How has the beneficiary managed money in the past?
2. Does the beneficiary have ongoing financial obligations that need to be met?
3. Does the beneficiary have issues with substance abuse or gambling?
4. Is the beneficiary emotionally capable and responsible?

Keep in mind that the executor of your estate may have the ability to pay for reasonable expenses on behalf of your child, before your child is able to control their inheritance themselves. 

Need Further Help?

For help preparing your Will, please do not hesitate to reach out to our Wills & Estates team on (03) 9548 5500.