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The right age to decide where a child's inheritance belongs

  • October 28, 2023

Home " Legal Blog " Wills and Deceased Estate Administration " The right age to decide where a child's inheritance belongs

The right age to decide where a child's inheritance belongs

Understanding Vesting in Succession

When discussing inheritance, "vesting" refers to the point at which a beneficiary acquires the right to his or her share of the estate. It is important to recognise that even with a vested interest, beneficiaries, particularly those under the age of 18, may not be able to access their inheritance immediately. This is often the case with residuary bequests involving younger beneficiaries. A will may determine the age of vesting, which may be after the death of the testator or when the beneficiary reaches a specified age.

Time of attribution: early vs. late

The age at which a beneficiary's rights vest can vary according to individual circumstances. Typically, it is recommended that children acquire their entitlement when they turn 18. This arrangement allows the trustee to use capital and income for the beneficiary's upbringing, education or other advancement in life if necessary. If not specifically provided for in the will, the law provides for the use of all income from the minor beneficiary's share, but only up to $2,000 or half of the capital, whichever is greater, may be used for advancement. If the age of vesting is set after age 18, the income can be accessed before the beneficiary reaches age 18, although the capital remains locked in.

Concerns about early succession

Many testators are concerned that beneficiaries receiving an inheritance too early may feel overwhelmed or mismanaged by younger beneficiaries. Some may suggest delaying vesting until the beneficiary is 21 or 25. While there may be a maturity difference between 18 and 21, it is rarely wise to extend the vesting age to 30. Waiting too long increases the risk that beneficiaries will die before receiving their inheritance. In addition, delaying an inheritance can create discord among beneficiaries, trustees, and other family members. If the beneficiary is prone to wasting money, a long vesting delay may not prevent eventual squandering. Sometimes it may be more beneficial for beneficiaries to manage their inheritance earlier.

To summarise: deciding the appropriate age for inheritance vesting requires a balance between protecting young beneficiaries and allowing them to bequeath. Carefully considered and tailored solutions can meet individual needs and circumstances. If you have any questions, please contact the experienced team at Chua Ching Hai Great Lawyers Voyage, pleaseclick hereLearn more, orContact UsOffice. Address Level 2, 262 Queen Street, Melbourne 3000, Phone 96023988

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