When a child or young person is gifted inheritance in a Will, they may not have full control over that money until they reach a specific age, otherwise known as a vesting age. This can be any age from 18 years or older and will be determined by the Will maker.
However, just because the receiver of the inheritance, known as the beneficiary, cannot have full access to their inheritance until the vesting age, does not mean that they cannot benefit from that money until they reach that age.
Until a beneficiary attains the vesting age, the inheritance will be managed by a trustee, who is nominated in the Will of the deceased. The trustee does not own the money, however, must administer the money in accordance with the Will and the law.
The trustee has many important duties, including the following:
- Acting in the beneficiary’s interests.
- Following the terms of the will or trust.
- Managing and investing assets prudently.
- Avoiding unauthorised conflicts of interest.
- Treating beneficiaries fairly where more than one beneficiary is involved.
- Maintaining appropriate accounts and records.
- Considering requests for payments properly rather than applying an inflexible policy.
Prior to the beneficiary attaining the vesting age, section 43 of the Trustee Act 1925 (NSW) allows for a trustee to utilise the inheritance held for the beneficiary for their maintenance, education, advancement or benefit. This is as long as the Will does not expressly restrict this power.
In relation to education, examples of where inheritance may be utilised, can include the following:
- School fees.
- Books, uniforms, and equipment.
- Tutoring or specialist educational support.
- University or vocational course fees.
- Computers and other necessary technology.
- Accommodation associated with study.
- Educational travel or exchange programs.
- Professional or trade qualifications.
Education is not necessarily limited to traditional academic study. Funding may extend to apprenticeships, music tuition, sporting development, or other training that supports the beneficiary’s abilities and future independence.
In relation to health and medical needs, examples of where inheritance may be utilised, can include the following:
- Medical and dental treatment.
- Counselling or psychological services.
- Disability-related equipment.
- Therapy and rehabilitation.
- Health insurance.
- Specialist assessments.
- Modifications to a home or vehicle required because of disability.
A trustee will usually consider whether the expense is reasonable, whether other funding is available, and how the payment fits within the beneficiary’s overall needs.
In relation to housing and living expenses, examples of where inheritance may be utilised, can include the following:
- Accommodation.
- Food and clothing.
- Essential household expenses.
- Furniture for the beneficiary’s home.
- Transport.
- Relocation costs.
- Suitable housing arrangements.
There are many other expenses that may be considered undermaintenance, education, advancement or benefit including a minor beneficiaries’ activities and personal development and to start an occupation, including tools and equipment for employment.
If you need advice regarding inheritance gifted to a minor beneficiary or regarding a deceased estate, please contact our firm to make an appointment with one of our wills and estate lawyers on (02) 4944 3322.
ABOUT NAOMI RIZZOLI
Associate
Naomi understands that family law matters are often turbulent and emotional and works with her clients empathetically to obtain the best result for each client.
Naomi studied law whilst working as a dance teacher and medical receptionist and utilises her experience working with people of all ages to help understand the needs of her clients and build rapport with them. She understands that family law matters are often turbulent and emotional and works with her clients empathetically to obtain the best result for each client.
