How can I ensure my daughters receive assets only after turning 25? | Mint

I am a 50-year-old Hindu widower with two young (5 and 7 years old) daughters. I want to prepare a Will bequeathing all my assets and properties to them equally. However, I want to include a condition stipulating that my daughters would not be entitled to receive the assets and properties bequeathed to them under my Will until they attain the age of 25 years, so that they have a greater maturity when they receive my money. Can I include such a clause in my Will?

-Name withheld on request

We assume that the assets in question are not ancestral property. 

Since you intend that your daughters receive the assets only once they attain the age of 25 years, you may consider drafting the Will to give interest in the assets to the executor of your Will till your daughters attain this age. If you do not create such interest, then if your daughters are major (i.e., they have attained 18 years of age) at the time of your demise, they will be entitled to receive and hold the assets bequeathed to them immediately. Whereas, if your daughters are minors, then the guardian named by you in your Will would be in charge of the property bequeathed by you to them till they attain majority, after which they can claim the assets for themselves. 

You may also consider, as an alternative, creating a ‘testamentary trust’, a trust created under your Will to hold the assets till your daughters turn 25 years old. The trustee of the trust may be the executor named in the Will or another trusted person. Such a trust would only take effect upon your death, but its provisions may be amended as required during your lifetime by amending the Will. 

A third alternative is to create a private trust during your lifetime and bequeath assets to the trust under your Will. In this trust, you may provide that the assets will be held for the benefit of your daughters till they turn 25 years old and distributed to them thereafter.

In each case, the executor or the trustee may be directed to reinvest the income from the assets (such as rent, dividend, etc.) and can be prohibited from disposing/selling your assets.  

Various factors must be considered for each structure, and it is advisable that you engage a lawyer who can advise on these factors and assist with drafting all the relevant documentation.

While drafting the Will or trust deed, you may decide whether your elder daughter receives the assets due to her immediately upon turning 25 without having to wait for your younger daughter to also attain 25, or whether both daughters should receive assets together once your younger daughter is 25.

Shaishavi Kadakia is a partner, and Radhika Parthasarathy is a senior associate at Cyril Amarchand Mangaldas, Mumbai.