A question of trust

Trusts are flexible vehicles and, as this article demonstrates, can be used to provide children with different degrees of access to a parent's inheritance, depending on their age. If a parent's Will is silent about the age at which their children can receive their inheritance then children will be entitled to receive the assets at 18. Until then the assets of the parent's estate will automatically be held on trust for the children. However, most parents would agree that 18 is too young for children to receive potentially life changing amounts of money.

Given that the assets of an estate can be held in trust for a number of years (as was the case with Prince William and Prince Harry's inheritance) the choice of trustees is key. The trustees should be individuals who the parent can rely on to manage the trust in the best interests of the children.

 Splitting the age that children become entitled to income and then capital is a useful tool for parents wanting to give children some financial independence but without receiving large sums of money at too young an age.

It is also possible to give more flexibility to the trustees and allow them discretion to decide at what age children should receive either income or capital from a parent's estate. This level of flexibility can be vital when dealing with an unusual or tricky set of circumstances – for example when the parent has very high levels of wealth or where the parent's wealth is concentrated in a long running family business. This ability for the trustees to decide when a child can receive their inheritance can also assist if passing assets to a child would ultimately be detrimental to them - for example because the child was a spendthrift or had addiction issues and so needed protecting from themselves.