5k left in Will for Kids

Gucci_3

My mum has left 5k for each of her Grandchildren.
They are not able to use until they are 21.
I have 4 children eldest 12....what is the best way for us to invest this money for them ?
Are we better off investing 20k as a lump investment between the children or 4 seperate ones ?

cloud_dog

This is not an easy one to answer because it all depends on your risk / reward threshold, etc.

To answer the easy one. I would not combine the funds into one pot I would keep them seperate - the reaon is in my next suggestion.

Wrt what to do with the money you will get a lot of different opinion (not advise). I am in a similar position (having a 9 month baby girl) with my mother wanting to gift the g/kids £5k.

What *I* would do (and am planning to do) is put £2.5k into a good savings account / bond (probably go for a savings account). With the other £2.5k being invested into a good fund. Going back to keeping the 'pots' seperate this is because your children are of differing ages and as they approach 21 you should consider moving the investments out of the funds into safer cash (or bond type funds) so that incase there is a financial crisis your childrens inheritence is not adversly affected.

The problem I am investigating with this approach is the legal aspect of ownership for the inheritance. For example open a normal savings account (Building Society) and at a certain age (not sure if it is 7 or 12) the child is legally the owner of the monies within that account. Now, you could keep the account hidden from the child but at some point they will receive financial information from the institution. Therefore I think you need to set it up within a simple trust - need to investigate further (unless there is someone else out there with the answers???)

cloud_dog