The children are our future – so why can’t they plan for theirs?

Today’s youth have the world at their fingertips, and the gifted (and sometimes just downright lucky) are capable of amassing small fortunes before they are even old enough to get behind the wheel of a car. It appears as though nothing can stand in their way, except perhaps the small issue of their inability to make any decision about who would inherit their wealth should they not make it to their 18th birthday. Although beyond the realm of consideration for the vast majority of minors, this can have a significant impact on those whose careers have already sprinted past the normal baby steps taken in our teenage years.

In England & Wales, the law is very clear; children under the age of 18 cannot make a will. If they die before their 18th birthday, their assets are inherited by their parents equally under the intestacy rules. Both parents are also equally responsible for administering the child’s estate. In theory, this should not be controversial, and it certainly wasn’t when the law first came into force in 1837. Unsurprisingly however, life has moved on a little over the last 180 years and this now may not be the most appropriate arrangement for today’s modern families where one or both parents may not be a central figure in a child’s life. Minors today have proved that they are more than capable of earning sums greater than a large portion of us will see in a lifetime, particularly those who are talented sports stars or entertainers. With football clubs offering pro contracts to 17 year olds, it is no surprise that the likes of Raheem Sterling, for example, reportedly earned £30,000 a week with Liverpool FC at that tender age.

The question therefore must be asked – if children are capable of earning, why are they not capable of deciding who to leave their fortunes to? Mum or Dad may never have been present in the child’s life, yet they can turn up and legally reap the benefits should the unthinkable happen. The Law Commission are aware of this potential for injustice, and launched a public consultation in July 2017 regarding the proposal to reform the age of testamentary capacity in England & Wales. The consultation has suggested two alternatives; either to lower the age of capacity, or to relax the absolute nature of capacity and allow people below the threshold age to make wills in appropriate cases.

Testamentary capacity is a complicated issue, and what may seem like an obvious decision in relation to one person may be completely unclear for another. A quick glance further afield only serves to confirm this; the age of testamentary capacity in Scotland is 12, in the USA it ranges from 14 to 18 depending on what state you are in, and in New South Wales in Australia it is 18 but can be younger if determined by a court.

The concept of a lower age limit on capacity also varies within England & Wales itself – 16 year olds can marry, pay tax, leave school, live alone, make their own medical decisions and join the army, yet they cannot drive and are still two years away from legally having a beer or deciding who they want to leave their assets to should they die. The thrust of the Law Commission consultation covers just this, and discusses striking the balance of being able to protect the youth without inhibiting their autonomy.

There are arguments at both ends of the pitch. Minors at common law can bind themselves into contracts for their benefit, yet it is clear that will making is more serious than every day contractual arrangements. It has been argued that only very few minors are capable of the high level of understanding and rationality required for will making, yet it has also been put forwards that children do not need so much protection when making wills as they are inherently rescindable documents and there is also less incentive to act irrationally as it concerns decisions for the future and not now.

It is entirely plausible that the earnings of young sports stars and global personalities of today will simply continue to rise. Some football teams are trying to address this - at the end of 2016 Liverpool set a basic salary cap for players under 17 of £40,000 per annum in their first pro season, but this does not take into account any of the other lucrative income streams which come hand in hand with professional sports. Combining this with the fact that family relationships are becoming more complex, the question of lowering the age of testamentary capacity can no longer be swept aside. If minors are able to earn such sums, surely they should be able to decide who to leave it to?

If you would like more information on how the points raised could impact you, please contact Lois Langton

This article also appears in The Times.