Will Trusts for Minor Children UK: Protecting Inheritances for Under-18s

Why Trusts Arise Automatically for Minors

A child under 18 (a minor) lacks full legal capacity under English law. The key practical consequence in estate planning is that a minor cannot give a valid receipt for capital assets — they cannot sign a receipt that relieves the personal representative or trustee of liability for the transfer. As a result, assets intended for a minor cannot simply be handed over on the testator’s death. They must be held on trust until the child attains the age at which the gift vests, at which point the child (now an adult) can give a valid receipt.

This rule applies whether or not the testator expressly creates a trust in their will. If a legacy is given to a child outright with no trust machinery, the personal representatives hold the gift on a statutory trust under the Trustee Act 1925 during the minority. A well-drafted will specifies the trustees, their powers, the vesting age, and the terms on which income and capital may be applied during the trust period. A poorly drafted will leaves the trustees with only the default statutory powers, which are limited and may not reflect the testator’s intentions.

Contingent vs Immediate (Vested) Legacies

A legacy in a will may be vested or contingent:

• A vested legacy is one to which the beneficiary has an immediate, unconditional entitlement — even if payment is deferred. For example, “I give £10,000 to my nephew Adam” is vested: Adam is entitled now, though the money may not be paid until the estate is administered. If Adam dies before the estate is wound up, the £10,000 passes to his estate.
• A contingent legacy is conditional on a future event — most commonly, surviving to a specified age. “I give £10,000 to my nephew Adam if he attains the age of 21” is contingent: if Adam dies aged 20, the gift lapses and returns to the residue. Adam has a hope of receiving the money but no current entitlement.

For children, the practical difference is significant. A vested legacy to a minor is held on trust during minority, but the child (through their estate if they die before reaching adulthood) retains the economic benefit. A contingent legacy is lost if the child dies before the vesting age. When drafting your will, consider whether you want the legacy to survive the child’s early death — if so, use a vested (or immediately vesting-with-substitution) structure; if not, use a contingent one.

Trustee Powers During the Minority Period

While the trust fund is held for a minor, the trustees have two core implied powers under the Trustee Act 1925 (unless the will excludes or modifies them):

Maintenance (section 31 TA 1925)

Trustees may pay income to the minor’s parent or guardian, or apply it directly for the minor’s maintenance, education, or benefit. They are not required to accumulate income — they have a discretion, guided by what would be reasonable for a person of moderate means. If the minor’s parents can fully fund their lifestyle without resort to the trust, trustees may choose to accumulate income rather than distribute it, building the fund for the child’s future.

Note that section 31 was significantly amended by the Trustee Act 2000 and the Trusts (Capital and Income) Act 2013. Wills should now contain a carefully drafted express maintenance clause rather than relying on the default statutory power, which may not reflect modern practice.

Advancement (section 32 TA 1925)

Trustees may advance capital for the benefit of the minor — for example, to fund education fees, start a business, or purchase a home. Under the original section 32, the advance was limited to one-half of the minor’s presumptive share. Since the Inheritance and Trustees’ Powers Act 2014, for trusts created on or after 1 October 2014, the cap is removed and the whole capital may be advanced. For older trusts, the half-capital limit may still apply unless the will grants a wider power.

A well-drafted will for minor beneficiaries will include an express wide advancement power, removing any doubt about the trustees’ ability to apply the full fund for the child’s benefit.

Choosing the Vesting Age: 18 vs 25 and IHT

Many parents feel that 18 is too young for a child to receive a large inheritance. They extend the vesting age to 21 or 25. This is entirely permissible, but it has significant inheritance tax consequences.

To qualify as a bereaved minor’s trust under section 71A IHTA 1984, the trust must arise on the death of a parent, the beneficiary must be a child of the deceased, and the trust must vest absolutely on or before age 18. The child must become entitled to the capital and income at 18 (or on earlier death). Grandchildren or step-children do not qualify for section 71A (though step-children may qualify if they were a child of the marriage).

The 18-to-25 trust under section 71D applies where the beneficiary is a child of the deceased, becomes absolutely entitled to income at 18 (at the latest), and becomes entitled to capital at any time between 18 and 25. A proportionate exit charge applies when capital is distributed between ages 18 and 25 — the longer the capital remains in trust after 18, the higher the charge, up to a maximum of approximately 4.2% at age 25.

Appointing Trustees for Minor Beneficiaries

The trustees you appoint in your will are critical. They will manage what may be a significant sum of money for a decade or more. When choosing trustees:

• Appoint at least two — joint trustees provide a check on each other, and two are required to give a valid receipt for capital from land held in trust. A sole trustee can give a valid receipt for money but is inadvisable for significant funds.
• Choose people with financial judgment, not merely people you like. Trustees have a duty to invest prudently under the Trustee Act 2000 and are personally liable for losses from breach of that duty.
• Consider age and availability — your trustees must be capable of acting throughout the trust period, which could be 18+ years if you die when your child is a newborn.
• Name substitutes — a trustee may die, lose capacity, or be unable to act. Your will should name at least one substitute trustee or grant the surviving trustees a power to appoint a replacement.
• Consider a professional trustee for large funds — a solicitor or trust corporation brings expertise but charges fees, which reduce the trust fund.

Note that the same person may serve as both executor and trustee — indeed, this is the most common arrangement. However, the same person cannot be the sole trustee and the sole beneficiary.

Practical Drafting Points

A will leaving assets to minor beneficiaries should address:

• The vesting age (usually 18 or 25) and whether it is contingent or vested.
• Who the trustees are and any substitute trustees.
• An express wide power of investment (beyond the default Trustee Act 2000 power).
• An express maintenance clause that reflects modern expectations — including whether to accumulate income during minority.
• An express wide advancement power (whole capital, not half).
• Trustees’ power to apply capital for the child’s education, health, housing, and general benefit.
• A substitutional gift in case the child dies before the vesting age.
• Appointment of a guardian for the child if both parents die, since a trustee and a guardian are separate roles.

WillSafe’s will kit prompts you to work through these decisions in plain English so that the resulting will reliably protects your children’s inheritance without unnecessary complexity.

Frequently Asked Questions