Every parent wants to know that their children will be financially secure, even in the worst-case scenario. It’s a natural part of planning your estate. You might think, “I’ll just name my kids in my Will, and they’ll be looked after.” But this is where things get a bit complicated.
It’s a common and very important question: can a minor receive an inheritance directly?
The straightforward answer is no, they can’t simply be given a large sum of money or property. The law steps in to protect them, and for good reason. But don’t worry, this doesn’t mean they can’t benefit from their inheritance. It just means a proper plan is needed.
Let’s walk through how this works and what you can do to make sure your wishes are carried out exactly as you intend.
So, Why Can’t Children Receive Inheritance Directly?
In simple terms, the law sees anyone under 21 as a minor. Minors are not legally capable of owning or managing significant assets, such as property or large sums of money. This rule exists to protect the child’s inheritance from being mismanaged or misused before they are old enough to handle it themselves.
What Happens if I Have a Will? (The Best-Case Scenario)
This is, without a doubt, the best way to handle things. Why? Because it puts you in control. When you have a valid Will, your wishes, not a default legal formula, will dictate what happens.
A Will is your instruction manual for your loved ones. You get to decide who, what, when, and how. You can ensure the inheritance is protected and used in a way that aligns with your values. It removes all the guesswork for your family during a challenging time.
Instead of uncertainty, they have a clear roadmap to follow, which is a huge relief. For your minor children, this means you get to personally choose who manages their money and how it is managed.
What is a Testamentary Trust?
This may sound like a very technical term, but the idea is actually quite simple. A “testamentary trust” is just a set of instructions you include in your Will. It’s a trust that only comes into effect after you pass away.
Think of it as the “owner’s manual” for your child’s inheritance. It tells your trustee exactly how you want the money managed. You can be very specific.
For example, you can state:
- What the money is for: “The funds can be used for my child’s university education, healthcare, and general living expenses.”
- When they get it: This is a big one. You might not want your child to get a large lump sum the moment they turn 21. A trust lets you stagger the payments. You could specify they get one-third at 21, one-third at 25 (after they’ve finished university), and the final third at 30 (when they are more settled). This gives you immense peace of mind.
Appointing a Trustee to Manage the Inheritance
This is one of the most important decisions you’ll make in your Will. A trustee is the person, or even a professional company, you appoint to be the legal manager of your child’s inheritance. They hold the assets on your child’s behalf.
Their job is to safeguard that inheritance. This means they are legally responsible for protecting it, managing it wisely (which may include investing it), and maintaining accurate records. This is a serious legal duty. You need to choose someone you trust completely.
This could be your spouse, a responsible sibling, or a professional trustee. They will be the ones who manage the funds and release them for your child’s education, health, and living needs, all according to the rules you lay out.
What Happens if There is No Will? (The Intestate Scenario)
This is the situation where you have no control at all. “Intestate” is the legal term for when someone passes away without leaving a valid Will. When this happens, you do not get a say in what happens to your assets.
Instead, your estate is distributed according to a strict legal formula, known as the Intestate Succession Act. This law doesn’t know your family, your relationships, or your wishes. It simply divides your assets based on a fixed list of rules.
For example, if you leave behind a spouse and children, the law states that they split the estate in fixed portions. However, here is the part that shocks most parents: the portion of the inheritance that belongs to your minor children does not automatically pass to your surviving spouse. Your spouse cannot just use that money for the children’s needs.
The most common scenario for a family is that if you leave behind a spouse and children, your estate is split in half. 50% goes to your spouse, and the other 50% is divided equally among your children.
Here’s the part that catches many people by surprise: your spouse does not automatically get to control the children’s 50%. That share legally belongs to the children, and because they are minors, it must be protected by a third party.
By law, that money must be handed over to the Public Trustee for management.
How the Public Trustee Gets Involved
This is where the Public Trustee’s Office comes into the picture. Because your minor children cannot legally own or manage their inheritance, the law requires that their share of the money be handed over to the Public Trustee.
This is a government body that acts as a neutral, professional trustee. Their job is to hold these funds, invest them safely, and manage them on the child’s behalf. It is a system designed to protect the child’s inheritance from being mismanaged or spent. While it is a very secure system, it is also an impersonal one. It means the surviving parent must apply to the Public Trustee to use the child’s own money for their upbringing.
Guardian vs. Trustee: What’s the Difference?
This is a point that often confuses, so let’s simplify it. Think of it as two different jobs:
- A Guardian is responsible for the child’s welfare. This is the person who decides where the child lives, what school they go to, and looks after their health and day-to-day upbringing. If one parent passes, the surviving parent is automatically the guardian.
- A Trustee is responsible for the child’s money. This person’s sole responsibility is to manage, protect, and distribute the inheritance in accordance with the rules (either as outlined in your Will or the law).
In a Will, you can (and often do) appoint the same trusted person to be both guardian and trustee. But if you have no Will, the roles are split: the surviving parent is the guardian, but the Public Trustee becomes the trustee.
How Can the Minor’s Inheritance Be Used Before They Turn 21?
Many parents worry that if their money is placed in the Public Trustee’s care, it will be locked in a vault and inaccessible. This is not true. The money is there for the child’s benefit.
The law allows the funds to be used for the child’s “maintenance, support, education, or benefit.” This is a broad definition, intended to ensure that the child’s quality of life is not compromised. The inheritance is meant to help raise them.
Applying for Maintenance (Education, Health, etc.)
So, what does “maintenance” actually cover? It covers all reasonable expenses associated with raising a child. This includes:
- Education: School fees, university tuition, enrichment classes, or a new laptop for school.
- Healthcare: Medical bills, dental appointments, or any special therapies.
- General Upkeep: This can include contributions towards living expenses like food, clothing, and even part of the household bills, as the child is part of that household.
The Process of Accessing the Funds
If the money is held by the Public Trustee, the guardian (the surviving parent) cannot simply withdraw it. They must make a formal application to the Public Trustee’s Office.
This typically involves completing forms and providing proof, such as school invoices or receipts, to demonstrate the purpose for which the money is needed. The Public Trustee reviews the request to ensure it’s for the child’s benefit and then releases the funds, often paying the school or hospital directly.
This is a key reason why having a Will is so helpful. If you appoint your own trustee, you can give them the flexibility to make these decisions without them needing to go through a formal government application process every time.
When Does the Minor Finally Get Control of the Inheritance?
The default finishing line is age 21.
On the child’s 21st birthday, they are legally considered an adult. At this point, the trustee’s job is over. The trustee (whether it’s the Public Trustee or the person you named in your Will) will prepare a final statement of accounts. This shows all the money that was held, any interest it earned, and any funds that were paid out over the years.
The entire remaining balance of the inheritance is then transferred to the child, who now has full and total control over it.
Conclusion About Inheritance for Minor Beneficiaries
Planning for your children’s future is one of the most important things you can do. Understanding how a minor’s inheritance is managed provides a lot of clarity. Whether you create a Will to appoint your own trustees or rely on the Public Trustee, safeguards are in place. The key is to have a plan.
If you need advice on writing a Will or managing estate matters, connect with the best family and Divorce lawyers in Singapore at Tembusu Law.
Contact us today for a free discovery call!
Frequently Asked Questions About Inheritance for Minor Beneficiaries
What Is the Age of Majority for Receiving an Inheritance?
In Singapore, the age of majority for this purpose is 21 years old. This is the default age at which a beneficiary can receive their inheritance directly, unless a Will specifies a later age.
Can I Name a Guardian in My Will?
Yes, you absolutely should. If you have minor children, you can and should appoint a guardian in your Will. This is the person who will be responsible for their personal care and upbringing if both parents pass away.
What Does the Public Trustee Do with the Inheritance Money?
The Public Trustee will hold the money in trust. They will invest the funds according to the rules set out in the Public Trustee Act to preserve their value and earn interest. They will also process applications from the minor’s guardian to release funds for the child’s maintenance and education.
Can a Guardian and a Trustee Be the Same Person?
Yes, they can. It is common for a parent to appoint their spouse or a trusted relative to be both the guardian and the trustee. However, you can also appoint different people for these two very different roles.
How Can I Avoid the Public Trustee Managing My Child’s Money?
The simplest way is to write a valid Will. In your Will, you can create a testamentary trust and appoint your own trustees to manage the inheritance for your minor children. This gives you control over who manages the money and how it is used.
