Trust fund for kids whose mum just died

Siobhan_2

A single mum whose daughter is in my son's class has just died (epileptic attack). Her children are 10 and 13. We are looking to do a fund-raiser for the children so they could have some money when they turn 16/17. Does anyone know how we could set up a fund which would probably have two lump sums put in (hopefully about £2000-£3000), ensure they get a good return and that only they can access it?
Would appreciate any info,
Many thanks in advance,
Siobhan

sylblake

So sorry to hear about your friend Siobhan, what a wonderful idea to offer such support at this tragic time.

Sorry I am not able to offer you practical advice but I am sure someone on this site will be able to point you in the right direction.

Good luck with your fundraising.

ReportInvestor

I would reiterate sylblake's sentiments.

Unfortunately - and it feels churlish to say so in the circumstances - the sums involved may not be large enough for it to be economical to set up a trust fund.

It is possible - for no charge - to set up a "bare trust" for investments made on a child's behalf and they gain access to the money at 18.

Investment Trusts will often provide this facility free of charge.

The 5-8 year timescale might (just about) be suitable for an equity investment. But I think that the people raising the funds should be consulted if any risk is to be taken with the money.

Siobhan_2

thanks so much - will look into bare trusts and also check out premium bonds.
Best wishes,
Siobhan

dunstonh

When funds are received like this for minors, the trustee of the funds has a legal responsibility to be seen to do the right thing. If the beneficiary of a trust thinks the trustee hasnt handled the investment correctly, irrespective of the amount, then they could take the trustee to court and the trustee could be made to pay compensation.

With that in mind, even though they are small amounts, it is worth seeking independent financial advice and getting a report written (which is standard for investment class business). This will give the trustee the audit trail showing that they sought the advice of an IFA and that the IFA takes on responsibility for the product chosen.

Premium bonds would almost certainly not be considered an appropriate investment.

montycat_2

Hi ,
I recently lost my hubby and similar things were suggested for me and my kids (3 under 10).
Personally,I would ask the Dad what he wants done with the money.He may have his own ideas etc.
One thing I found that annoyed me ,was everybody deciding things for me without considering my views .
It is a traumatic time for those involved and money was the last thing on my mind .I opted for the fundraising money to go to a charity close to our hearts as ,insurances were adequate to set up funds formy kids .
Please don't rush into anything .