Could Your Child's Guardian Spend Their Inheritance?

No, the person raising your children cannot simply treat the money you left them as household income. Money left to a child is held by trustees, not by the guardian, and only the trustees can release it. A guardian can ask for money to meet the children's costs, but they cannot help themselves to the fund, and every payment out of it has to be for the child's benefit and has to be accounted for.

That distinction is the whole protection. It is also the thing most parents do not realise they need to set up, because they picture the guardian and the money as one arrangement. In a well-drafted will they are two: someone raises the children, and someone, often a different someone, holds and controls the money for them.

Whether a guardian can spend a child's inheritance therefore comes down to how you leave it. Leave it loosely and the line between "the child's money" and "the household's money" can blur. Leave it with named trustees, defined powers and a clear age for the child to take over, and the fund stays ring-fenced for the child it was meant for.

The short answer: trustees hold it, not the guardian

When you leave money to a child, the law will not let a child under 18 control it, so someone has to hold it for them. That someone is a trustee. If your will names trustees, they do the job; if it does not, the people administering your estate end up holding it under the general law. Either way, the guardian who is bringing the children up is not automatically the person in charge of the money.

This surprises people because the guardian is the one living with the day-to-day costs. But that is exactly why the money is held separately: it keeps the fund pointed at the children rather than absorbed into the running of a busy household. The guardian asks; the trustees decide and release. It is worth being completely clear on the difference between a guardian and a trustee, because most wills that go wrong here are the ones that quietly assumed they were the same job.

Guardian and trustee are two different jobs

A guardian makes the parenting decisions: where the children live, what school they attend, what time they come home. A trustee makes the money decisions: what the fund is invested in, what it pays out, and when the children finally receive it outright. The two roles overlap in daily life, because the trustee is funding the very things the guardian is deciding, but they are legally distinct and can be held by different people.

Keeping them separate is not distrust; it is structure. Even a guardian who is scrupulously honest benefits from a trustee standing slightly apart, because it means no one person is both spending the money and approving the spending. And where a guardian is also appointed as a trustee, having a second, independent trustee alongside them restores that check. The cleanest arrangement, for reasons set out in why naming a guardian is free but funding one is not, is to fund the guardian properly and hold that funding under trustees who are not the guardian alone.

What trustees are actually allowed to pay for

Trustees are not sitting on the money for its own sake. They have real powers to spend it for the children, and the two that matter most come from long-standing trust law.

The first is the power of maintenance: trustees can apply the trust's income for a child's maintenance, education or benefit. In practice that covers the things children cost, school uniform and trips, clothing, activities, and a fair share of the household expenses that keep a roof over them, such as a proportion of heating, food and transport. The second is the power of advancement: trustees can pay out capital, not just income, for a child's benefit, which might mean funding a course, a car for a first job or, later, a deposit.

Both powers are exercised for the child, not for the household in general. A trustee can properly pay the children's share of the family's costs. What a trustee cannot do is treat the fund as the guardian's income or use it for the adults' own purposes. The test each time is whether the payment is genuinely for the child's benefit.

Where the line is: the child's fund is not household income

The difficult cases are not the obvious ones. Nobody thinks a trustee can buy the guardian a holiday from a child's inheritance. The grey area is the household, where the children's costs and the adults' costs run through the same bills.

Here the honest principle is proportion. If three children join a household of two adults, a fair share of the rent or mortgage interest, the utilities and the weekly shop is attributable to the children and can properly be met from the fund. The whole of it cannot. Trustees who fund the children's genuine share, and keep a note of how they worked it out, are doing the job correctly. Trustees who let the fund become the family's general income are not, and they can be called to account for it, sometimes years later, by the children themselves once they are old enough to ask.

Where a child has additional needs, the line has an extra dimension, because a clumsy payment can cost the child means-tested support. Families in that position should read leaving money to an autistic child without losing their benefits, since the wrong structure can do real damage even where everyone acts in good faith.

How the fund can be misused, and how the law catches it

The risk is rarely dramatic theft. It is drift: a fund that gradually props up a household's lifestyle rather than paying for the children within it, one reasonable-sounding payment at a time.

The law's answer is accountability. Trustees hold the money on trust, which means they owe legal duties to the children as beneficiaries. They must act in the children's interests, keep the trust money separate from their own, and be able to show what was spent and why. A beneficiary who reaches adulthood is entitled to see the trust accounts and to challenge payments that were not properly for their benefit. Trustees who cannot justify what they did can be made to put it right personally. That prospect, more than anything, is what keeps a well-run trust honest, and it is why records matter as much as good intentions.

The wording that ring-fences your child's money

Most of the protection is decided when the will is drafted, not afterwards. A few choices do the heavy lifting.

Appoint at least two trustees, and make at least one of them independent of the guardian, so no single household both spends and approves. Say clearly in the will what the trustees may fund and at what age the children take the money outright. Add a letter of wishes, which does not bind the trustees but tells them how you would want the fund used, guiding without tying their hands. And separate the money from the property side of your affairs deliberately: whether your home passes as you assume depends on how it is owned, which is why it is worth checking whether you are joint tenants or tenants in common, and why holding everything in joint names does not remove the need for a will. Where the home is meant to house the children, leaving the house to the children rather than a spouse is a decision to take with advice, because it interacts with the trust.

All of this assumes there is a fund to protect in the first place. For many families the fund is a life policy, and having an FCA-authorised broker size it against what raising the children would actually cost is the practical starting point. You can get life insurance quotes and then have the proceeds directed into a trust for the children, so the money you leave is controlled the way you intend rather than landing in a single account.

When the money passes outright, and the Scottish surprise

The trust does not last forever. At some point the child stops being a beneficiary a trustee looks after and becomes an adult who simply owns the money. When that happens is set by your will, and the choice matters.

In England and Wales, if you say nothing, money left to a child under the intestacy rules passes to them at 18. Many parents think that is young for a lump sum, and a will can hold it back to 21, 25 or another age, with trustees able to help earlier for sensible things in the meantime. In Scotland there is a trap for the unwary: a young person generally acquires legal capacity to hold and manage property at 16 under the Age of Legal Capacity (Scotland) Act 1991, so absent a trust holding it longer, money can pass to a Scottish child at 16 rather than 18. If you would not want a sixteen-year-old to receive a large sum outright, the will has to say so and set up a trust that lasts.

Scotland and Northern Ireland

The idea that money for a child is held and controlled by trustees runs through all three UK jurisdictions, but the detail differs. Scotland has its own trust law, recently modernised, and its own rules on legal capacity and on the protected legal rights that children have in a parent's moveable estate, which a will cannot simply override. Northern Ireland has its own trustee legislation, broadly similar in effect to England and Wales but not identical.

Wherever you are, the safeguards are the same in spirit: name trustees, keep them distinct from the guardian, set the age the money passes, and write down what the fund is for. The statute that governs the detail changes with the border, so take advice under the right system rather than assuming the English rules apply throughout. The rest of this topic is collected in our guide to wills, guardianship and children.

Frequently asked questions

Can a guardian spend my child's inheritance?

Not directly. Money left to a child is held by trustees rather than the guardian, and only trustees can release it. They may pay for the child's maintenance, education and benefit, but the fund is not household income and every payment must be accounted for. A guardian can ask for money to meet the children's costs; they cannot help themselves to the fund.

What can trustees pay out before a child turns 18?

Under the statutory powers, income can be applied for the child's maintenance, education or benefit, and capital can be advanced for their benefit. That covers school costs, clothing, activities and a fair share of household expenses, provided trustees can justify each payment as being genuinely for the child rather than for the adults in the house.

How do I stop the fund becoming the household's money?

Appoint at least two trustees and pick someone independent of the guardian. Set the age at which capital passes, spell out what trustees may fund, and ask them to keep records. A letter of wishes sets expectations without tying their hands, and separating the person who spends from the person who approves is the single most effective safeguard.