Children and Inheritance: When’s a Good Age?

For many parents, it’s clear that their children will inherit most or all of their estate. However, the best means of giving their children their inheritance is less clear. Some worry that getting a large sum of money too young might harm a child’s drive to succeed, or allow them to waste opportunities their inheritance might have provided them with. Others believe inheriting at a younger age can provide their children with greater opportunities to establish themselves, their career, and their own family. So, when should children receive their inheritance?

There is no perfect age for inheritance. Every person is different, and how they will use their inheritance can vary widely. The will-writer decides when and how the inheritance is given through specific terms in their will. Parents should consider the size of the inheritance, their child’s financial situation, and personal traits when making this choice. It’s also important to note that minors in BC can’t receive an inheritance until they’re 19 or older. Any inheritance a minor is entitled to will be held by the Public Guardian and Trustee of British Columbia until they’re 19 years old.

How Inheritances Can Be Distributed to Children

Many parents are surprised to learn they don’t have to give their children their entire inheritance all at once. When planning your estate, one of the most important decisions is how and when your children will receive their inheritance. There is no one-size-fits-all approach, so it’s important to consider your options based on your family and children’s unique situation. Some common options considered by parents when making their estate plan include:

• Immediate lump sum distribution:
  • You children receive their entire inheritance upon your passing.
• Age-based distribution:
  • You set specific ages for when your child will receive portions of their inheritance with staggered payments.
• Milestone-based distrubution:
  • You decide on specific milestones that your child must reach to receive specific portions or the lump sum of their inheritance. This can allow you to financially support your child for an important milestone without them having access to a large sum all at once.

Deciding What is Right for Your Estate Plan

Deciding how and when your children should receive their inheritance can be a challenging and very personal process. Every family is unique, and an estate plan that works for one family may not work for another. By creating a detailed estate plan with an experienced lawyer, you have access to a number of estate planning tools to make a plan that is right for your family. Some things parents may consider when deciding how to structure their child’s inheritance distribution include:

• The child’s financial responsibility and experience handling money;
• The child’s current financial situation, and situation in the foreseeable future; and
• Your values and goals for your family.

In the end, it’s up to parents to decide when and how their children should receive their inheritance. Financial maturity and the size and nature of the inheritance are both crucial in making this decision. If you’re a parent, unsure how you want to set-up your child’s inheritance or trust, contact an experienced estate lawyer today.

Have a question about this topic or a different legal topic? Contact us for a free consultation. Reach us via phone at 250-888-0002, or via email at info@leaguelaw.com.