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Can Guardians Access My Children's Inheritance?

· 25 min

Note: The following scenario is fictional and used for illustration.

Emma and David had been putting off an uncomfortable conversation for months. They'd asked Emma's brother Mark to be their children's guardian if anything happened to them both. Mark was loving, playful, and absolutely devoted to his two nieces, aged 5 and 8.

But Mark had declared bankruptcy three years ago. He regularly overspent on his credit cards. And he'd once lost £12,000 in a cryptocurrency scheme.

Emma trusted Mark completely with her daughters' wellbeing. But with their £400,000 estate? That was a different question entirely. She kept thinking: "If we both die, will Mark accidentally lose everything we've worked so hard to protect for our girls?"

According to M&G Wealth research, 19% of clients worry about children squandering early inheritance, while STEP reports that 63% of members have witnessed incompetence in wills and trust administration. Yet over 50% of UK parents with children still lack a will, leaving these concerns entirely unaddressed.

This guide will show you exactly what guardians can and cannot do with your children's inheritance, how to separate guardian and trustee roles, and which legal structures protect your children's financial future—so you can appoint the right person for care without compromising financial security. For broader guidance on wills for new parents, see our comprehensive family planning guide.

Table of Contents

Understanding the Difference: Guardian vs. Trustee

The confusion between guardians and trustees is where most parents' anxiety begins. These are two completely separate roles with distinct legal responsibilities.

A guardian is the person you appoint in your will to care for your children if you die. Under the Children Act 1989, Section 5, they gain parental responsibility—making decisions about your child's education, healthcare, living arrangements, and day-to-day welfare. They're essentially stepping into your shoes as a parent.

A trustee is the person who manages your children's financial inheritance. Trustees control how money is invested, saved, and spent until your children reach a specified age—typically 18, 21, or 25. They hold legal ownership of the assets on behalf of your children.

Here's the critical point: guardianship does NOT automatically grant financial control. Unless your will explicitly names the guardian as trustee, these remain separate roles.

You could appoint your sister Sarah as guardian (she'll raise your children) while appointing your financially experienced friend James as trustee (he'll manage their £350,000 inheritance). Sarah cares for the children daily. James controls the money. Sarah can request funds from James for the children's needs, but she can't access the inheritance directly.

According to Dutton Gregory Solicitors, approximately 10,000 individuals in the UK are involved in disputes over estates annually, many stemming from unclear trustee appointments or confusion between guardian and trustee roles.

Guardian Responsibilities Trustee Responsibilities
Daily care and upbringing Managing financial assets
Education decisions Investment decisions
Healthcare decisions Releasing funds for children's benefit
Living arrangements Protecting capital until specified age
Emotional wellbeing Accounting for trust expenditures
Represents child legally Fiduciary duty to beneficiaries

Now that you understand these are separate roles, let's explore what happens if you don't specify who controls the money.

What Happens to Children's Inheritance Without a Trust?

If you die without setting up a trust in your will, UK law has default rules that might surprise you.

Children inherit money outright at age 18 in England and Wales (16 in Scotland). Until then, the executors of your will—who are often the same people as the guardians—hold the inheritance on behalf of your children.

This creates three significant risks.

First, 18-year-olds receive full control of potentially large sums with no financial experience. An 18-year-old inheriting £300,000 can legally withdraw every penny the day they turn 18, regardless of whether they're financially mature enough to handle it.

Second, if your guardian is also your executor, they DO have access to the inheritance—albeit with legal duties to act in your children's best interests. This is where Emma's concern about Mark becomes real. If Mark is both guardian and executor, he'll control her daughters' £400,000 until they turn 18.

Third, there's no protection against poor financial decisions by guardians-as-executors. While they have legal obligations, mistakes happen. Investment losses, excessive spending on non-essentials, or simply poor money management can erode the inheritance significantly.

David's story illustrates this risk. He died unexpectedly, leaving £280,000 to his 12-year-old son. His brother became both guardian and executor. The brother was loving and well-intentioned, but he made poor investment decisions during the 2008 financial crisis and used trust funds for expenses that weren't strictly necessary—a holiday to "help the boy cope with grief," expensive electronics, a car when the boy turned 17.

By the time David's son turned 18, only £135,000 remained. The brother hadn't acted dishonestly, but the lack of oversight and financial expertise had cost the boy nearly half his inheritance.

The key takeaway: without a trust structure separating these roles, guardians who are also executors CAN access children's inheritance, though they're legally bound to use it appropriately. But legal obligations don't guarantee financial competence.

So how do you prevent this? The solution is a testamentary trust.

How Testamentary Trusts Protect Children's Inheritance

A testamentary trust is a trust created within your will that takes effect when you die. It's the primary legal mechanism for protecting your children's inheritance from mismanagement, premature access, or poor decisions.

Here's how it works: assets pass into the trust rather than directly to your children. The trustees you appoint have legal control over investments, distributions, and spending decisions. Your children don't receive the money until they reach an age you specify—often 21, 25, or distributed in stages (25% at 21, 25% at 25, 50% at 30).

The structure offers three critical protections.

Delayed access: Your children don't get full control at 18. You choose when they're mature enough. Many parents set the age at 25, when young adults have typically completed education, gained work experience, and developed better financial judgment.

Professional management: Trustees can be financially responsible family members or professional advisors who know how to invest, preserve capital, and make prudent spending decisions.

Separation of care from money: This is the game-changer for Emma's situation. Guardians don't automatically control the inheritance unless you also name them as trustees. You can appoint your loving sister as guardian while your financially experienced brother manages the money.

According to HMRC guidance on trusts for bereaved minors, these trusts can receive favorable inheritance tax treatment if structured correctly, potentially saving your estate thousands in tax.

Sarah's approach demonstrates this perfectly. She set up a testamentary trust for her two children, naming her sister as guardian but her brother (a financial advisor) as trustee. If Sarah dies, her sister raises the children day-to-day. Her brother manages their £500,000 inheritance.

The trust releases funds for school fees, extracurricular activities, and reasonable living costs. But the capital remains protected and invested until each child turns 25. Sarah's sister can't access the money directly—she requests funds from the trustee, who verifies expenses are appropriate and releases payment.

This structure gives Sarah's children both the loving care her sister provides and the financial protection her brother's expertise ensures.

A common misconception stops many parents: "I need an expensive solicitor to set up a trust." In reality, basic testamentary trusts can be included in straightforward wills, including online wills that cost a fraction of traditional solicitor fees.

But what if you WANT your guardian to have some access? Let's explore when combining roles makes sense.

When Should You Allow Guardian Access to Inheritance?

Separating guardian and trustee roles isn't always necessary or appropriate. Sometimes appointing the same person for both roles is the right choice.

Consider combining roles when your guardian is financially responsible. If your chosen guardian is excellent with money—an accountant, financial planner, or someone who has demonstrated financial prudence over many years—combining roles simplifies administration.

James appointed his financially savvy sister as both guardian and trustee for his daughter. His sister has successfully managed her own investments for 20 years, has no debt, paid off her mortgage early, and built a substantial pension. James trusts her completely with both his daughter's care and her £200,000 inheritance.

Small estates present another scenario. If your estate is modest—under £50,000—the administrative burden and cost of separate trustees may not justify the complexity. The inheritance might be used primarily for your children's immediate needs rather than long-term capital preservation.

Guardian financial need matters too. If your chosen guardian would struggle financially to raise your children, you may want them to have trustee access to release funds easily. Raising additional children is expensive. A guardian earning £35,000 might need regular access to trust funds to cover increased housing costs, food, clothing, and activities.

But here's the crucial caveat: even when a guardian is also a trustee, they still have fiduciary duty under UK law to act in your children's best interests. They cannot use funds for personal benefit, make investments that favor themselves, or prioritize their own children over yours.

Risk mitigation remains important. Even if you combine roles, consider appointing a second co-trustee to provide oversight. Co-trustees must agree on major financial decisions—typically anything over £5,000. This requires both people to sign off on significant expenditures or investment changes.

David appointed his brother as both guardian and trustee but named his sister as co-trustee. His brother handles day-to-day expenses and small requests. But any decision over £5,000—school fee payments, major medical expenses, home improvements—requires his sister's approval.

This structure balances convenience with protection. The guardian has access for routine needs but can't make large, questionable withdrawals without someone else agreeing.

Research from The Level Group's 2025 Inheritance Report found that 40% of people would dispute a will if they felt inheritance was unfair, highlighting the importance of transparency and accountability in trustee appointments.

If you're concerned about potential misuse despite these precautions, UK law provides even stronger safeguards.

UK law takes trustee obligations seriously. Even if your guardian is also your trustee, substantial legal protections prevent misuse of your children's inheritance.

Fiduciary duty is one of the strongest legal obligations in UK law. Trustees must act in beneficiaries' (your children's) best interests at all times. This isn't a suggestion—it's a legally enforceable duty with serious consequences for breaches.

Trustees cannot:

  • Use trust funds for personal expenses
  • Make investments that benefit themselves rather than beneficiaries
  • Favor their own children over yours if they have children of their own
  • Act dishonestly, recklessly, or negligently with trust assets
  • Self-deal (buy trust assets for themselves or sell their own assets to the trust)

Legal consequences of breaching fiduciary duty:

If a trustee mismanages funds, they face removal from the trustee role immediately. They can be sued personally for losses caused to the trust—meaning they must repay any money lost through poor decisions. In serious cases involving dishonesty or fraud, they can face criminal charges.

When your children become adults, they can enforce their rights. They can challenge trustee decisions, request full accounting of trust assets going back years, and take legal action if funds were mismanaged. Trustees must keep detailed records of every transaction, investment decision, and expenditure.

You can include practical safeguards in your will beyond legal requirements:

Multiple trustees: Appoint two or three trustees who must agree on major decisions. This prevents any single person from making questionable choices without others knowing.

Professional trustee oversight: Include a solicitor, accountant, or trust company as one of the trustees to provide professional judgment and regulatory accountability.

Specific spending guidelines: Detail in your will what trustees can spend money on. For example: "My trustees may release funds for private school fees only if my children wish to attend, for university tuition and living costs, and for medical expenses not covered by NHS."

Regular reporting requirements: Specify that trustees must provide annual written reports to another family member detailing trust assets, income, expenditures, and investment performance.

According to STEP's 2024 research, 79% of members have encountered errors in wills, but professional trustee involvement significantly reduces mismanagement risks.

These legal protections are substantial, but the best protection is choosing the right people in the first place. Let's explore how to structure separate guardian and trustee appointments in your will.

How to Appoint Separate Guardians and Trustees

Structuring your will to keep guardian and trustee roles separate requires specific language and careful thought about who fills each position.

Why separate roles: This approach allows you to choose the best person for each job. Your most loving, nurturing family member becomes guardian for day-to-day care. Your most financially competent, trustworthy person becomes trustee for money management.

How to structure it in your will:

Your will needs three distinct clauses:

Guardian clause: "I appoint [Full Name] as testamentary guardian of my children [Child's Full Name] and [Child's Full Name]. If [Guardian Name] is unable or unwilling to serve, I appoint [Backup Guardian Name] as substitute guardian."

Trustee clause: "I appoint [Different Person's Full Name] as trustee of my children's inheritance trust. If [Trustee Name] is unable or unwilling to serve, I appoint [Backup Trustee Name] as substitute trustee."

Trust distribution rules: "My trustee shall hold my residuary estate on trust for my children in equal shares. Each child shall receive their share in stages: 25% at age 21, 25% at age 25, and 50% at age 30. Until distribution, my trustee may release funds for my children's education, medical expenses, and reasonable living costs."

Choosing the right trustee:

Look for financial competence. Choose someone with a good financial track record, professional experience in accounting, law, or finance, or at minimum someone willing to seek professional financial advice before making investment decisions.

Trustworthiness is non-negotiable. This person will have significant control over your children's future financial security. Choose someone you trust absolutely—someone who has demonstrated integrity, responsibility, and genuine care for your children's wellbeing.

Consider longevity. Choose someone likely to be alive and mentally capable when your children reach adulthood. Avoid elderly relatives unless you name strong backup trustees. The trustee should ideally be at least 10 years younger than you or in robust health.

Emma's structure demonstrates this perfectly. She appoints her brother Mark as guardian—he'll raise her daughters with love and devotion. She appoints her friend Claire, a chartered accountant, as trustee—Claire will manage the £400,000 inheritance.

Claire releases funds to Mark for school fees, dance lessons, medical expenses, and contributions to household costs. But Mark cannot access the trust capital or make investment decisions. Every significant expense goes through Claire's approval.

Backup appointments are critical: Always name substitute guardians AND substitute trustees. Life is unpredictable. Your first choice might die before you, become incapacitated, or simply change circumstances and be unable to serve.

Communication matters: Discuss these appointments with both people beforehand. Your guardian needs to understand how to request funds from your trustee. Your trustee needs to understand your children's needs, your values, and your spending priorities.

Consider a letter of wishes—a non-binding document that accompanies your will and explains your reasoning, values, and guidance for both guardian and trustee.

But what if you don't have a financially savvy friend or family member? There's another option.

Professional Trustees: When and Why to Use Them

Not everyone has a friend or family member with the financial expertise to manage a substantial inheritance. Professional trustees offer an alternative that brings expertise, impartiality, and regulatory oversight.

A professional trustee is a solicitor, bank trust department, or specialized trust company appointed to manage your children's inheritance. They bring financial expertise, investment knowledge, and tax planning skills. They're regulated by professional bodies like the Law Society or Financial Conduct Authority.

Benefits of professional trustees:

Expertise: They know how to invest wisely, minimize tax, navigate complex trust law, and preserve capital while generating income. They have resources and experience most family members lack.

Impartiality: They have no personal relationship with your guardian, reducing conflict of interest. They can say "no" to questionable expense requests without family tension.

Accountability: Regulated professionals maintain detailed records, provide annual statements, and follow strict professional standards. They have professional indemnity insurance if something goes wrong.

Continuity: Institutions outlive individuals. A trust company will still exist when your children reach adulthood—even if that's 20 years from now. There's no risk of the trustee dying before distributing the inheritance.

Costs: Professional trustees charge fees. Typical rates are 1-2% of trust assets annually, or hourly rates for solicitor trustees (£200-£400 per hour). For a £300,000 trust, annual fees might be £3,000-£6,000.

When to consider professional trustees:

Large estates: If your estate exceeds £500,000, professional management may justify the cost. The investment expertise and tax savings can exceed the fees paid.

Complex assets: Business interests, overseas property, or substantial investment portfolios benefit from professional trustee management.

No suitable family or friends: If no one in your life has financial competence or trustworthiness for this role, a professional is far better than appointing someone unsuitable.

Blended families: Situations with potential conflict between children from different relationships benefit from a professional's impartiality.

Michael, a business owner with a £1.2 million estate, appointed his sister as guardian for his two children but named a trust company as professional trustee. The annual fees are approximately £15,000, but Michael valued the expertise and impartiality, especially since his estate includes business interests requiring professional management.

Hybrid approach: You can appoint both a family member and a professional as co-trustees. This combines personal knowledge of your children with financial expertise. The family member ensures spending decisions reflect your children's real needs. The professional ensures investments are sound and records are properly maintained.

Whether you choose family trustees or professionals, they need clear guidance on how to use the inheritance for your children's benefit.

What Can Trustees Spend Children's Inheritance On?

One of parents' most practical questions: exactly what can trustees spend trust funds on? UK trust law provides broad guidance, but you can be as specific or flexible as you wish.

Under UK trust law, trustees can use trust funds for children's "maintenance, education, and benefit." This legal standard is deliberately broad, encompassing:

Education: School fees for private or state schools, university tuition and accommodation, tutoring or specialized educational support, educational trips or study abroad programs, books, laptops, and educational supplies.

Extracurricular activities: Sports lessons and equipment, music lessons and instruments, dance or drama classes, clubs and youth organizations, summer camps or activity holidays.

Living costs: Clothing and shoes, food contributions to guardian's household, housing costs (if guardian needs help), medical expenses beyond NHS coverage, therapeutic support if needed.

Life milestones: Driving lessons and first car (if reasonable), university graduation gifts, wedding contribution (though trustees aren't obligated), house deposit assistance.

What trustees cannot spend on: Luxuries for the guardian personally, guardian's personal debts or financial problems, investments that primarily benefit the trustee, speculative or reckless investments, any expenditure that doesn't genuinely benefit your children.

You control this through your will. You can give trustees broad discretion: "My trustees shall use their judgment to provide for my children's needs." Or you can set specific rules: "My trustees may pay for private school fees only if my children express a wish to attend, up to £20,000 per child per year."

Example guidance in a will:

"My trustees may spend income and up to £20,000 of capital per year per child for their education, healthcare, and reasonable living expenses. My trustees should prioritize my children's education and wellbeing over preserving capital. My children's needs come first."

How the process works:

Your guardian typically submits requests to your trustee with supporting documentation. "School fees for the year are £15,000—here's the invoice." The trustee reviews the request, verifies it's appropriate and reasonable, then releases funds directly to the school or reimburses the guardian.

For routine expenses, trustees often set up monthly or quarterly payments to the guardian for predictable costs. For one-off expenses, the guardian requests funds as needed.

When Emma's husband died, her brother-in-law (trustee) managed her children's £300,000 inheritance for 10 years. He released £120,000 for private school fees, £15,000 for university expenses, £8,000 for driving lessons and a modest first car, £5,000 for annual family holidays, and regular monthly payments for their share of household costs.

The remaining £200,000—which grew through careful investment—was distributed when each child turned 25. The trustee kept detailed records of every expenditure. When the children became adults, they could see exactly how their inheritance had been managed.

Accountability: Trustees must maintain detailed records of all spending. They should be prepared to justify every decision to your children when they become adults. This accountability keeps trustees honest and ensures spending genuinely benefits your children.

These principles apply in the abstract, but what about specific real-world scenarios?

Common Scenarios: When Guardians Need Access to Inheritance

Let's explore five common situations that worry parents, showing how properly structured trusts handle practical challenges.

Scenario 1: Guardian can't afford to raise children without financial help

Mark becomes guardian to his two nieces after Emma dies. He earns £35,000 per year. He simply cannot afford to feed, clothe, house, and care for two additional children from his salary.

Solution: The trustee (Claire) releases £2,000 per month from the trust to cover the girls' share of household costs—food, utilities, housing, clothing, school expenses. This is perfectly legal and expected. Guardians are not required to bankrupt themselves to raise your children.

Over 10 years, this is £240,000—more than half the £400,000 inheritance. But it ensures Mark can provide a stable, comfortable home without financial stress.

Scenario 2: Guardian wants to move to a bigger house to accommodate children

Sarah becomes guardian to her nephew after her brother dies. Her two-bedroom flat cannot comfortably fit an additional child. She wants to buy a three-bedroom house but can't afford a larger deposit.

Solution: The trustee loans £80,000 from the trust as a house deposit. A legal agreement specifies that when the nephew turns 18, the loan is repaid to the trust from Sarah's equity when she sells the house or remortgages.

This arrangement gives Sarah suitable housing while protecting the nephew's inheritance. The £80,000 is repaid with interest, ensuring he still receives his full inheritance later.

Scenario 3: Emergency medical expenses

A child needs private medical treatment not available on NHS for a rare condition. Time is critical.

Solution: Trustees can release funds immediately for urgent medical needs. Most trust deeds allow trustees to act quickly in emergencies without lengthy approval processes.

The trustee releases £25,000 within 48 hours for specialist treatment. The child's health comes first—this is exactly what the trust exists for.

Scenario 4: Guardian and trustee disagree on spending

The guardian wants to send a child to a £40,000-per-year boarding school. The trustee thinks this is excessive and suggests a £15,000-per-year day school instead.

Solution: They review the parents' letter of wishes, which emphasized "excellent education but within reason" and "keep siblings together if possible." They discuss the child's needs, temperament, and whether boarding school genuinely benefits them.

They compromise on a £20,000-per-year private day school that provides excellent education without excessive cost. If they can't agree, either party can apply to court for direction—though this is rare.

Scenario 5: Guardian is also trustee and faces temptation

David appointed his sister as both guardian and trustee. She's trustworthy but faces financial pressure. Her own children are the same ages as David's son. She might be tempted to favor her children or justify questionable expenses.

Solution: David required his brother to co-sign any trust expenditure over £5,000. Major expenses—school fees, equipment purchases, holiday costs—require both sister and brother to approve.

Additionally, David specified that his brother receives annual written reports showing all trust assets, income, expenditures, and investment performance. This transparency prevents questionable spending without obvious oversight.

The key message: properly structured trusts are flexible enough to support children's real needs while preventing misuse.

Frequently Asked Questions

Q: Can a guardian access my children's inheritance directly?

A: No, guardians cannot access children's inheritance directly unless they are also named as trustees. Guardianship gives parental responsibility for your child's care, education, and welfare, but does NOT automatically grant control over inherited money or property. You must separately appoint trustees to manage financial assets.

Q: What's the difference between a guardian and a trustee?

A: A guardian is responsible for your child's daily care, upbringing, and wellbeing—essentially acting as a parent. A trustee manages your child's financial inheritance, making decisions about how money is invested, saved, or spent for the child's benefit. These can be the same person or different people, depending on your will's structure.

Q: Can I appoint different people as guardian and trustee?

A: Yes, and many parents choose to do exactly this. You might appoint a loving family member as guardian for day-to-day care, while appointing a financially responsible sibling or professional as trustee to manage the inheritance. This separation provides checks and balances to protect your children's financial future.

Q: What happens if I don't set up a trust for my children?

A: Without a trust, children inherit money outright at age 18 in England and Wales (16 in Scotland). Until then, their legal guardians or the executors of your will manage the inheritance on their behalf. A trust allows you to set conditions, delay access until they're older (e.g., age 25), and appoint specific people to control how the money is managed.

Q: How do trustees access money for my children's needs?

A: Trustees can release funds from the trust for your children's maintenance, education, and welfare. This includes school fees, extracurricular activities, medical expenses, and living costs. The trust deed specifies what trustees can spend money on, and they have a legal duty to act in your children's best interests—not their own.

Q: Can a guardian use my children's inheritance to cover their own expenses?

A: No. Guardians are not legally required to support your children from their own resources, but they also cannot use your children's inheritance for personal expenses. If you've set up a trust, trustees can release funds to cover reasonable costs of raising your children, but these must genuinely benefit the children—not the guardian personally.

Q: What legal protections exist to prevent guardians mismanaging inheritance?

A: UK law requires trustees to act in beneficiaries' best interests under fiduciary duty. If a guardian is also a trustee and mismanages funds, they can face legal action, removal from the trustee role, and personal financial liability. You can also appoint multiple trustees or an independent professional trustee to provide oversight and prevent misuse of funds.

Conclusion

The fear that keeps Emma awake at night—that her brother Mark might mismanage her daughters' inheritance—is legitimate, but it's also solvable.

Key takeaways:

  • Guardians do NOT automatically control your children's inheritance—only if you explicitly name them as trustees
  • Testamentary trusts separate care (guardian) from money management (trustee), allowing you to choose the best person for each role
  • UK law provides strong protections: trustees have fiduciary duty and face legal consequences for mismanagement
  • You can appoint family trustees, professional trustees, or a combination, depending on your estate size and family dynamics
  • Trust funds can be used for children's education, living costs, and wellbeing, with trustees accountable for every decision

By separating guardian and trustee roles in her will, Emma can give Mark what he's best at—loving her daughters—without giving him access to what he's worst at—managing £400,000. Her daughters will have both the guardian who'll nurture them and the financial protection that'll secure their future.

Your children deserve the same.

Protect your children's inheritance with a properly structured will. With WUHLD, you can create a legally binding will that includes testamentary trust provisions, separate guardian and trustee appointments, and clear guidance on how your children's inheritance should be managed—all in just 15 minutes online.

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  • Your complete, legally binding will with trust provisions
  • A 12-page Testator Guide explaining guardian and trustee roles
  • A Witness Guide
  • A Complete Asset Inventory document

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Legal Disclaimer:

This article provides general information only and does not constitute legal or financial advice. WUHLD is not a law firm and does not provide legal advice. Laws and guidance change and their application depends on your circumstances. For advice about your situation, consult a qualified solicitor or regulated professional. Unless stated otherwise, information relates to England and Wales.

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