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What Is The Best Age For Your Children To Receive An Inheritance?

Oct 30, 2017 9:00:00 AM The MacMillan Estate Planning Team


A lot of estate planning is simply ensuring that your family, and especially your child (or children) will be well looked after once you’re gone. However, parenting is not just about looking after the material needs of your dependents. Many affluent Canadian parents want to provide for their children if they pass away suddenly, but they also want their children to be motivated and ambitious. These parents are usually self-made, ultra high-net-worth individuals, and they want to pass on their values of hard work and a drive to succeed. So what’s the best age for your child to receive their inheritance?

Age is often the deciding factor for when children inherit. If your estate plan doesn’t specify another age for them to receive their inheritance, your child will automatically receive it at the age of majority for their province. However, many parents (rightfully) feel that the average 18 or 19 year old is probably not mature enough to handle a lump sum of thousands or even millions of dollars. In that case, they may choose a later birthday. Prince William and Prince Harry, for example, each inherited the money their mother, Princess Diana, had left for them when they turned 30 respectively.

Slowly Distributing the inheritance is also an option. This is a particularly good idea for ultra high-net-worth individuals as it allows your child to slowly become accustomed to being responsible for a fortune as they accomplish more and more in their life. Typical events that could trigger a lump sum include achieving an undergraduate degree, achieving a graduate degree, getting married, buying a home, etc. As a parent, you can decide how much your child would receive for every achievement. Perhaps they are given $10,000 after graduating from their bachelor’s degree but $20,000 if they complete a master’s.

Divorce & Bankruptcy are two of the biggest exterior threats to your child’s finances. Even if your child is exceptionally responsible for their age, you may be still looking out for their best interest by slowing down their inheritance. They’ll be less likely to attract selfish, mean-spirited “friends” who just want to take advantage of their wealth. Or worse, a spouse who only marries your child to gain access to their money. By keeping the bulk of their inheritance in a trust until they’re older, you can protect that money from early divorces and bankruptcies as your child grows up.

Choosing when your child will inherit is a very personal decision for you as a parent. Nobody want to think about the possibility of their early death leaving their child an orphan, but it’s particularly important that affluent Canadians plan ahead incase the unthinkable happens. At MacMillan Estate Planning, these sorts of hard decisions only make up a small fraction of creating your personalized estate plan. We consider estate planning to be life planning, and while we will walk you through the hard decisions of your will, we’ll also help you learn about tools for avoiding excessive taxation, passing on your business to the next generation, and more! To schedule your free consultation with our estate experts, call us today.

At MacMillan Estate Planning, our team of professional trust and estate practitioners, chartered accountants, financial planners, and legal professionals look forward to assisting you with the design of your estate plan and will ensure you build, protect, and enjoy your wealth. The information provided is general and may not be suited to your objectives or sufficient to ensure the protection of you and your family. You should not act on this information without providing MacMillan Estate Planning with the opportunity to ensure that it is suitable for your unique situation.

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