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Can I Leave Gifts to Minors in My Will?
People often want to leave money or gifts in their Will to children or grandchildren. There are different ways in which you can do this, and it is important to consider how you want to leave your money when making a Will.
Here, at Johnson Astills, we encourage our clients to consider the tax implications of passing on money to children, grandchildren or other relatives – particularly if they are minors, and we give our clients the chance to discuss their own circumstances before making decisions.
Can I leave an outright gift of money to a minor in my Will?
An outright gift of money in a Will is where you leave a sum of money to a beneficiary which they will be fully entitled to as soon as the administration of your estate has been concluded, or when they reach a specified age contingency.
Things you would need to consider include whether the beneficiary would be old enough to inherit that money and manage it as well as you would like them to after you die. Maybe your beneficiaries are going through a separation or divorce, and this could be classed as a matrimonial asset which would be shared with their spouse? Or maybe the beneficiary is bankrupt and would use the money to pay off any creditors?
It is important to consider different factors which would be relevant to your family circumstances and the sum of money you are considering to gift outright.
Can I leave my estate to my children/grandchildren?
You can leave your estate to your children, grandchildren or other people even if they are minors. If they are under 18 then their share of your estate will be managed by the Trustees of your estate until they reach 18. You will need to consider at what age you would like your beneficiaries to become absolutely entitled to their share of your estate and you may choose to increase the age contingency to 21 or 25.
If there are any minor beneficiaries in your Will that are not your own child, i.e. a grandchild, niece/nephew or other person, and there is an age contingency on the gift, then this alters the type of Trust that the money will be held in. When the age contingency is met and the money is released to the beneficiary, there may be a small charge to Inheritance Tax (IHT) and this will be between 1.8 and 4.2%. If the money is held in the Trust for a long period of time, then there may also be periodic charges. These tax implications are something that you need to be aware of when preparing a Will.
If any minor beneficiaries are your own child and the age contingency is not greater than 25, then the Trust is such that it does not attract any periodic or exit charges.
If you would like to discuss preparing a Will or review an existing Will with a view to including money gifts and/or minor beneficiaries, one of our expert estate planning Solicitors here at Johnson Astills would be pleased to assist you.
Please get in touch with Johnson Astills today and we would be more than happy to discuss your requirements further. Please call us at our office in Leicester or our office in Loughborough. Alternatively, you may prefer to email us at firstname.lastname@example.org or fill in our enquiry form.