Holding a Child's Inheritance Back Until 21 or 25

Yes, you can stop your child inheriting at 18. If your worry is that your children could receive everything you leave the week they turn eighteen — a whole estate, a house, a life insurance payout, handed to a teenager with no strings — a properly drafted will can hold it back until 21, 25, or any age you choose. The default of 18 comes from the intestacy rules, and the intestacy rules only apply when you have not made a will that says otherwise.

The tool that does this is a trust written into your will. Instead of the money passing to your child outright at 18, it is held by trustees you have chosen, who look after it and release it in line with your instructions until the child reaches the age you set. In the meantime the trustees can still spend money on the things that matter — education, a first home, a helping hand into work — so deferring the age is not the same as locking the money away.

There is a cost to waiting past 18, though, and it is the part almost no will-writing page mentions honestly: an inheritance tax charge applies to the years after your child's eighteenth birthday. It is usually modest, but it is real, and you should choose the vesting age with your eyes open rather than pick a comfortingly high number by instinct.

Why 18 is only the starting point

The reason so many people fear the "everything at 18" outcome is that it is genuinely the law when there is no will. Under the intestacy rules for England and Wales, a child's share is held on trust and passes to them absolutely at 18. No will means no choice about the age, and no choice about maturity, circumstances or what the money is for. The teenager simply becomes entitled.

A will changes that completely. You can direct that your children take their inheritance at 21 or 25, or in stages, and you appoint trustees to hold and manage it until then. This is one of the most common reasons parents with young children make a will in the first place, and it is a decision that only a will can make for you. Leaving it to the default is itself a decision — just not usually the one people would choose if they realised they were making it, as our piece on what happens to your assets when there is no will shows in a different context.

What age is right is a judgement about your own child rather than a rule. Eighteen suits some; others benefit from a few more years before a large sum lands. The point is that the choice is yours to make, deliberately, rather than having it made for you by a rule written long before your family existed.

The two trusts the law gives you

Where the money is going to your own children, the tax system recognises two particular kinds of will trust, and the difference between them is entirely about the age at which the child takes the capital.

The first is a bereaved minor's trust. Here the child becomes absolutely entitled to the capital at 18. In exchange for that relatively early vesting, the trust gets very favourable inheritance tax treatment: there are no periodic charges while it runs and no charge when the money comes out. If you are content for 18 but want trustees in control during the childhood years, this is the clean option.

The second is an 18-to-25 trust. This lets you push the age at which your child takes the capital up to a maximum of 25. It keeps most of the tax advantages — in particular, it avoids the ten-yearly charges that apply to ordinary trusts — but it does not escape entirely. Because the child is taking the money later than 18, an exit charge applies, calculated only on the slice of time after their eighteenth birthday. That is the price of the extra years, and it is the detail the next section is about.

Push the age beyond 25, or use a fully discretionary trust, and you leave these special regimes behind and enter the ordinary trust tax rules, with their own periodic and exit charges. That can still be the right answer for some families, but it is a bigger decision and needs proper advice.

The price of waiting past 18

Here is the part the marketing pages skip. An 18-to-25 trust is not free. When the money finally passes to your child, an inheritance tax exit charge is worked out, and the clock for that charge starts on the child's eighteenth birthday rather than on the day you died. The longer the money is held after 18, the more complete quarters have passed, and the larger the charge grows — reaching its maximum if the child waits all the way to 25.

Two things make this bearable rather than frightening. First, the charge only bites on the period after 18, so the years of childhood before that are ignored entirely. Second, the rate that builds up over those few years is small compared with the headline rate of inheritance tax that applies to estates on death — this is a fraction of that, not the same thing. But it is a genuine cost, and it is the trade-off you are accepting in return for the reassurance that a 19- or 20-year-old will not receive the whole sum at once.

None of this should be guessed at. The precise figures depend on the size of the fund and the exact dates, so this is a point to put to a solicitor or a tax adviser when the will is drafted. The general framework of trusts and inheritance tax is explained on the government's own pages, and the interaction with life insurance in particular is covered in our guide to why a life payout can be taxed and how a trust changes that.

Source: HM Revenue & Customs, Trusts and taxes guidance, GOV.UK.

Deferring is not locking the money away

A common misconception is that setting a later age means your child gets nothing useful until then. That is not how a well-drafted trust works. Trustees are normally given the power to advance money before the vesting age for the things a growing young person genuinely needs: school and university costs, a deposit on a first home, help starting a business, a car to get to work. What they withhold is not support, but an unconditional lump sum handed over regardless of circumstances — the difference between a young adult who is helped through university and into a first home, and one who receives a life-changing sum in a single transfer at an age when few of us made our steadiest decisions.

That is why the choice of trustees matters as much as the choice of age. You are picking people who will use judgement on your behalf for years, releasing money sensibly and saying no when saying no is right. Many parents deliberately keep the people who raise the children and the people who hold the money slightly separate, so that decisions about spending are made calmly and are properly recorded rather than blurred into day-to-day family life.

Choosing a later age, then, does not deprive your child. It simply delays the moment when the remaining balance is theirs to do with entirely as they wish, while making sure real needs are met along the way. Age cliffs like this exist elsewhere in the system too, sometimes harshly — a child's pension entitlement can stop dead at a fixed age, as we describe in the pension that stops the month she turns 23.

Choosing the age, and funding the trust

Two practical decisions follow from all of this. The first is the age itself. There is no universally correct answer; 21 and 25 are the common choices, and staged inheritance — some at 21, the rest at 25 — is popular because it hedges the bet. Think about the individual child, not an abstract ideal, and remember that trustees can always help earlier while holding the balance back. A cautious, settled eighteen-year-old and a more volatile one are not well served by the same rule, which is exactly why the law lets you choose an age rather than imposing a single one on every family.

The second decision is whether there is enough money for the trust to matter. A trust is only as useful as what you put into it, and for most families with young children the largest single thing they can leave is a life insurance payout. Writing that policy into trust does two jobs at once: it can keep the money outside your estate, and it channels the proceeds straight into the trust structure your will sets up, ready to be held to the age you chose. If protecting your children this way is a gap for you, you can get life insurance quotes through an FCA-authorised broker and size the cover to what your children would actually need across the years you want the money to last. The wider set of choices sits in our guide to wills, guardianship and children.

Scotland and Northern Ireland

The inheritance tax rules for these trusts are set by HMRC and apply across the whole UK, so the bereaved minor's trust and the 18-to-25 trust work the same way in Scotland and Northern Ireland as in England. What differs is the surrounding succession law and the age of majority.

Scotland is the significant exception. A young person there gains legal capacity to deal with money and contracts at 16, not 18, and Scottish children have legal rights — a fixed entitlement to a share of the moveable estate that a will cannot take away. That means a will trust in Scotland can defer a gift you freely leave, but it cannot defeat a child's legal rights, which can be claimed from 16. If you are in Scotland, plan around that floor rather than assuming the English default of 18; our guide to prior rights and legal rights in Scotland sets out how those entitlements work.

Northern Ireland broadly follows the England and Wales pattern, with 18 as the age at which an outright entitlement would otherwise arise and the same trust options available. You can read the government guidance on trusts and tax on GOV.UK, and get free, independent help understanding your options from Citizens Advice.

Frequently asked questions

Can I stop my child inheriting at 18?

Yes. A will can hold a child's share in trust until 21, 25 or another age you choose, with trustees able to release money earlier for education, housing or other needs. It is only the intestacy rules that impose the default age of 18, and those apply only when there is no will directing otherwise.

What is an 18 to 25 trust?

It is a will trust for your own children under which they take the capital at some point between 18 and 25. It has its own inheritance tax treatment: no ten-yearly charges, but an exit charge worked out only on the period after the child's eighteenth birthday, growing the longer the money is held.

Is 25 too late?

That is a judgement about the individual child rather than a rule. Trustees can advance money before then for a deposit, a course or a business, so a later vesting age simply delays the unconditional handover rather than locking the fund away entirely. Many parents split the difference and release the money in stages.