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  • FIRST POST
    • philipjuk
    • By philipjuk 8th Oct 17, 6:29 PM
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    philipjuk
    Children not being able to access money until they're 25
    • #1
    • 8th Oct 17, 6:29 PM
    Children not being able to access money until they're 25 8th Oct 17 at 6:29 PM
    My nephew and niece were recently left money by their grandfather, Not a huge amount but they already have quite a bit of money saved which they will get when they're 18. Their mother does not want them to have access to any more money until they are 25. Kids ages are currently 15 and 11. What are the options?

    Thank You in advance.
Page 1
    • Eco Miser
    • By Eco Miser 8th Oct 17, 6:42 PM
    • 3,077 Posts
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    Eco Miser
    • #2
    • 8th Oct 17, 6:42 PM
    • #2
    • 8th Oct 17, 6:42 PM
    It's theirs already. They get access at 18.
    The only option now is to get them to understand that money is not for wasting.
    Eco Miser
    Saving money for well over half a century
    • Alexland
    • By Alexland 8th Oct 17, 10:32 PM
    • 423 Posts
    • 252 Thanks
    Alexland
    • #3
    • 8th Oct 17, 10:32 PM
    • #3
    • 8th Oct 17, 10:32 PM
    Unfortunately not a lot you can legitimately do other than downplay the situation (maybe explain the inheritance is invested to help them later in life) and maybe express the donor's wishes if there were any?
    • cloud_dog
    • By cloud_dog 9th Oct 17, 11:55 AM
    • 3,179 Posts
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    cloud_dog
    • #4
    • 9th Oct 17, 11:55 AM
    • #4
    • 9th Oct 17, 11:55 AM
    I know this is all a bit too late but...

    This is why I've guided my mother to specify in her will that she leaves £x to the child and £y to be left in trust, and to used for the benefit of the grandchild by the parents with any remaining monies becoming the child's at age 25.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • Malthusian
    • By Malthusian 9th Oct 17, 12:48 PM
    • 3,022 Posts
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    Malthusian
    • #5
    • 9th Oct 17, 12:48 PM
    • #5
    • 9th Oct 17, 12:48 PM
    My nephew and niece were recently left money by their grandfather, Not a huge amount but they already have quite a bit of money saved which they will get when they're 18. Their mother does not want them to have access to any more money until they are 25. Kids ages are currently 15 and 11. What are the options?
    Originally posted by philipjuk
    Unless the grandfather's Will was drawn up in a very specific way, they are entitled to the money at 18. The mother has no more say than she would over money they received at age 18 from an employer or a lottery win.

    The money needs to be sensibly invested as a prudent person of business would invest their own money. With a minimum seven year timeframe for the 11 year old it is clear that this should be in real assets to prevent the money losing its value to inflation.

    For the 15 year old it is less clear as 3 years is too short to invest in the stockmarket - but that assumes the 15 year old will want to spend all the money when he reaches 18. This is a good time to be talking about investments with the 15 year old and involving him in the decisions.

    This is why I've guided my mother to specify in her will that she leaves £x to the child and £y to be left in trust, and to used for the benefit of the grandchild by the parents with any remaining monies becoming the child's at age 25.
    Originally posted by cloud_dog
    Your post is a bit confused. Is "the child" you or the grandchild? If the second "the child" is the grandchild and the Will is as you describe, then they will be able to access the trust's money at 18.
    • xylophone
    • By xylophone 9th Oct 17, 2:59 PM
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    xylophone
    • #6
    • 9th Oct 17, 2:59 PM
    • #6
    • 9th Oct 17, 2:59 PM
    If the money has been left to the children absolutely and without contingency, ("indefeasibly vested") and the only reason that they may not have immediate access is that they are minors and cannot give good receipt for the money, then it should be held in bare trust and they have the absolute right to call for access and control at the age of 18.

    It is possible for a trust to be a bare trust where the settlor has directed that the money not be paid over until an age beyond 18 but see

    http://trustsdiscussionforum.co.uk/t/bare-trusts-beyond-18/2008

    I have clients who want to make substantial lifetime gifts to grandchildren and, because of the nature of the assets, have to use bare trusts. I have told them about a bare trust being, effectively, a nominee arrangement, so that each grandchild will, on reaching 18, be able to call for the transfer of the assets to him. The clients are not happy about 18-year-olds having free access to large sums of money - a universal concern.

    Their accountant has pointed out to me TSEM1563. This gives an example (Example 1) of a Will leaving residue to those of testatrix's grandchildren who survive her, but directing that money is not to be paid out until each reaches 21. This is given as an example of a bare trust - which is clearly correct in that each grandchild alive at the date of death has a vested interest, and it is only the direction as to age which delays payment.

    I am asked if the new bare trusts cannot impose a similar condition delaying payment to a later age. My instinct is that this is not possible (not least because, if it were, everyone would be doing it) but I cannot put my finger on any authority for that.



    It is entirely possible to defer the payment date in the way suggested. However, that does not get over the fact that it remains a bare trust and the rule in Saunders v Vautier will still apply (the child is the only possible beneficiary) and so the child will be able to call for payment of the trust fund as soon as they reach age 18 regardless of the deferred payment date. Such a trust would not be an 18-25 trust for IHT purposes.
    Graeme Lindop
    Coles Miller Solicitors LLP


    See

    https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem1563
    • cloud_dog
    • By cloud_dog 9th Oct 17, 5:16 PM
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    cloud_dog
    • #7
    • 9th Oct 17, 5:16 PM
    • #7
    • 9th Oct 17, 5:16 PM
    Your post is a bit confused. Is "the child" you or the grandchild? If the second "the child" is the grandchild and the Will is as you describe, then they will be able to access the trust's money at 18.
    Originally posted by Malthusian
    Yes, should have stuck with one or the other.... my child, my mothers grandchild
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
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