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    • reg091
    • By reg091 15th Jun 17, 6:55 PM
    • 34Posts
    • 0Thanks
    reg091
    Trust fund for child
    • #1
    • 15th Jun 17, 6:55 PM
    Trust fund for child 15th Jun 17 at 6:55 PM
    Maybe I am using the wrong terminology but I am thinking that decades ago you could put money into a "trust fund" for your child which they could only have when they were 18 or 21.

    I think this involved a solicitor and I assume that the money grew in some safe fund or other.

    Now I have a four year old son and would like to put £20K into something like this, But, am I right to assume that there are now zillions of options, many of them fly by night cowboys, schemes that can fail leaving him with nothing, companies that can go bust leaving him with nothing, risk levels for investment to be considered etc?

    Maybe that has always been the case and I am just wearing rose-tinted glasses in thinking that in the "old days" you went to a solicitor and they sorted it all out and everything was guaranteed (or maybe that was just guaranteed that the same some of money deposited would be paid out, perhaps there was no investment angle?).
Page 1
    • xylophone
    • By xylophone 15th Jun 17, 7:14 PM
    • 23,480 Posts
    • 13,652 Thanks
    xylophone
    • #2
    • 15th Jun 17, 7:14 PM
    • #2
    • 15th Jun 17, 7:14 PM
    Have you begun with his JISA?

    https://www.gov.uk/junior-individual-savings-accounts/overview

    If not, you could start with that?

    Remember the £100 rule if you make income bearing gifts to your minor child outside tax efficient schemes like JISA.

    https://www.gov.uk/savings-for-children

    https://www.gov.uk/trusts-taxes/parental-trusts-for-children

    http://www.boltburdon.co.uk/private-clients/wealth-planning/trusts/parental-trusts-minors/
    • reg091
    • By reg091 15th Jun 17, 7:44 PM
    • 34 Posts
    • 0 Thanks
    reg091
    • #3
    • 15th Jun 17, 7:44 PM
    • #3
    • 15th Jun 17, 7:44 PM
    Thanks Xylophone, but I kinda thought you could just go to a solicitor, say "here's 20K, sort something so that he gets and more it when he is 21".

    With that JISA thing you link to I can only put £4k in.

    Is it just that I have to do full on investment research and look at stocks and shares and ISA's and interest rates and fund managers and build a portfolio of investments etc etc to say "here's £20K, make sure my son gets it and more when he is 21"?
    • Keep pedalling
    • By Keep pedalling 15th Jun 17, 10:03 PM
    • 3,954 Posts
    • 4,313 Thanks
    Keep pedalling
    • #4
    • 15th Jun 17, 10:03 PM
    • #4
    • 15th Jun 17, 10:03 PM
    Thanks Xylophone, but I kinda thought you could just go to a solicitor, say "here's 20K, sort something so that he gets and more it when he is 21".

    With that JISA thing you link to I can only put £4k in.

    Is it just that I have to do full on investment research and look at stocks and shares and ISA's and interest rates and fund managers and build a portfolio of investments etc etc to say "here's £20K, make sure my son gets it and more when he is 21"?
    Originally posted by reg091
    If you want to use a good chunk of that £20k in fees that would be be a good plan. Just drip feed into a JISA, plenty of advice on here as to which funds to use.
    • eskbanker
    • By eskbanker 16th Jun 17, 12:48 AM
    • 5,818 Posts
    • 5,711 Thanks
    eskbanker
    • #5
    • 16th Jun 17, 12:48 AM
    • #5
    • 16th Jun 17, 12:48 AM
    Thanks Xylophone, but I kinda thought you could just go to a solicitor, say "here's 20K, sort something so that he gets and more it when he is 21".

    With that JISA thing you link to I can only put £4k in.

    Is it just that I have to do full on investment research and look at stocks and shares and ISA's and interest rates and fund managers and build a portfolio of investments etc etc to say "here's £20K, make sure my son gets it and more when he is 21"?
    Originally posted by reg091
    If you want to use a good chunk of that £20k in fees that would be be a good plan. Just drip feed into a JISA, plenty of advice on here as to which funds to use.
    Originally posted by Keep pedalling
    As one of the IFAs who posts on here says, you have a choice of DIY or getting someone to do it for you - if you do it well, DIY can be cheaper or more cost-effective, but if you don't do it well then obviously it can go the other way!

    As an alternative to the JISA suggestion, if you don't already have a stocks and shares ISA you can open one in your name, put the £20K (annual limit for adult version) into it, invest it in a typical 'fire and forget' global multi-asset fund (Vanguard LifeStrategy, L&G Multi-Index, HSBC Global Strategy, Blackrock Consensus, etc) and gift the proceeds to your son at your leisure when you decide he's old enough. Doing this inside an S&S ISA protects the investment from taxes but the money would still be deemed to be yours should you ever need means-tested benefits for example.

    Build your confidence a bit first by researching on this site (http://www.moneysavingexpert.com/investments/) and the likes of www.monevator.com
    • xylophone
    • By xylophone 16th Jun 17, 1:12 AM
    • 23,480 Posts
    • 13,652 Thanks
    xylophone
    • #6
    • 16th Jun 17, 1:12 AM
    • #6
    • 16th Jun 17, 1:12 AM
    You might begin by using your child's JISA allowance for the current tax year. (£4080).

    https://www.charles-stanley-direct.co.uk/Our_Services/JISA/?utm_source=adwords&utm_medium=cpc&utm_campaign=CS D_Brand&gclid=CNrS7L-JwdQCFdQ_GwodnccEgw

    http://monevator.com/how-to-invest-for-children/

    You could then add the full subscription to the JISA in subsequent years.
    • reg091
    • By reg091 16th Jun 17, 8:18 AM
    • 34 Posts
    • 0 Thanks
    reg091
    • #7
    • 16th Jun 17, 8:18 AM
    • #7
    • 16th Jun 17, 8:18 AM
    Brilliant advice - thanks all, it has helped to clarify things. Now I will do some research.

    Part of my criteria is also that I "lock the money away" from me now, so that I am not tempted to spend/fritter it! Hence thinking of some legal protection to stop me getting at it in, say, 5 years time!
    • xylophone
    • By xylophone 16th Jun 17, 10:06 AM
    • 23,480 Posts
    • 13,652 Thanks
    xylophone
    • #8
    • 16th Jun 17, 10:06 AM
    • #8
    • 16th Jun 17, 10:06 AM
    Part of my criteria is also that I "lock the money away" from me now,
    You could put the rest of the money into a child account.
    Remember the "£100 rule" (see post above).
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