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Children Receiving Inheritances: When’s A Good Age?

Children Receiving Inheritances: When’s a Good Age?

For most parents, it’s a no-brainer that your children are going to receive the majority, if not all, of your estate when you pass away. On one hand, parents worry that inheriting a large sum of money at a young age might corrupt a child’s development, possibly diminishing their will to work hard towards a successful career. On the other hand, inheriting a large amount of money can be a platform to help create a successful career. The question that arises is then, at what age should your children receive your estate?

Unfortunately, there isn’t a perfect age for inheritance. Everyone is different, and will be affected differently by receiving an inheritance, and it is ultimately up to the will-writer to decide when and how their beneficiaries receive their inheritance through the terms expressed in the will. For parents leaving gifts to their children, the size of the inheritance and their child’s financial situation and personal tendencies should be taken into account when making this decision. It’s also important to note that minors in BC can’t receive an inheritance until they’re 19 years of age 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.

How Inheritances Can Be Distributed to Children

Frequently, parents are surprised to learn that they don’t have to distribute their estates in a lump sum all at once to their children. An option available to parents is to put their children’s inheritance into a trust fund. With a trust fund, parents can create specific rules that the child must follow regarding when they can receive parts of the inheritance. Parents can make terms such as giving a percentage of the estate at specific ages, or upon different milestones, such as graduating university or having a child. To help explain, let’s look at an example.

A single mom who has one child plans to give the entirety of her $100,000 estate to her son. At the time of writing the will, the woman’s son is 19 years old. The woman has many options available to her:

  1. Give the son all of the estate immediately when she passes away;
  2. Give the son a percentage of the estate at the age of 20, 25, 30, 35, etc.;
  3. Give the son a percentage of the estate when he reaches different specified events in his life.
A family trust account in BC can have a lifetime up to 80 years.

Let’s say the woman elects to go with option (3). She could choose to give her son 20% of the estate to pay for his university education, 20% of the estate when he graduates, 20% when he starts a full-time job making an annual salary of $50,000 or more, 20% when he has his first child and the remaining 20% when he retires. In creating this incentive-based trust, the woman can ensure that her son is able to fulfill his goals without being financially hindered. All the while, her son is not put in a position where he must handle all $100,000 at one time.

How to Choose How and When to Give the Inheritance

In most cases the older the child is at the time of preparing your estate plan, the easier it is to gage their level of maturity and ability to handle money. When a child has had their first job and had their own money, a parent can get a basic understanding of how they might handle an inheritance. For a child who’s only 5 years old, it’s nearly impossible to know how responsible the child will be with money once they’re older.

Depending on the age of the child, parents can try testing their children with small amounts of money, to see how they use the funds. Giving your child 5% of your estate today to see what they do with it can give a good outlook on the possible future. Do they invest the money? Do they buy a new car with the money? Do they pay off debts? This can be a worthwhile test to see how they might use the full inheritance if they were to receive it today.

In some cases, parents may feel that their child will not handle a cash inheritance in a responsible way. A parent could instead elect to give an inheritance that isn’t in the form of cash. The money could be gifted with the purpose of purchasing a home or only to be used to pay off debts. This way, the child doesn’t have the free will to spend the inheritance as they see fit. It’s up to the terms of the trust fund, which the parent decides.

In the end, it’s up to the parent to decide when and how a child should receive their inheritance. Financial maturity and the size 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 trust fund, contact an experienced estate lawyer today. We will ensure that your estate is distributed exactly as you want.

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

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