what happens if grandparent dies?

tazwhoever

if a grandparent has some money for their grandchild in normal bank account (not CTF), what happens if the grandparent dies in relation to bank account?

JCB2020

It will be treated as assets of the deceased estate

Dispersal of the estate will be in accordance with the contents of the will, provided one has been made

If not the state gets involved and the rules of intestate apply

If the grandparent wants the child to have the money in life a will is the best way to make sure they get it in death

Alternatively create a Bare Trust in the child's name and transfer the money into it

martinman3

The bare trust which JCB2020 mentioned is preferable since the exemptions from IHT (if it may be a problem) would allow the grandparent to give the funds to the beneficiary now rather than leave them in a will.
http://www.hmrc.gov.uk/inheritancetax/intro/basics.htm#4

They can give £3000 annually, small gifts up to £250 or if the amount is greater than £3000 ("Potentially Exempt Transfers") the IHT will reduce over the following 7 years.

i.e. It will be much better to put the money in a trust account now and make use of the annual exemption or for larger amounts "start the 7 year clock ticking".

I am not a legal expert but I suspect the will should mention whether the contents of the account should be given to the beneficiary on death or if a new trustee should be appointed until the beneficiary is a certain age.

Edit: Instead of that the better option is to open the account(s) with two trustees, the grandparent and someone else who will carry out their wishes if the worst happens.

CLAPTON

martinman3 wrote: »

The bare trust which JCB2020 mentioned is preferable since the exemptions from IHT (if it may be a problem) would allow the grandparent to give the funds to the beneficiary now rather than leave them in a will.
http://www.hmrc.gov.uk/inheritancetax/intro/basics.htm#4

They can give £3000 annually, small gifts up to £250 or if the amount is greater than £3000 ("Potentially Exempt Transfers") the IHT will reduce over the following 7 years.

i.e. It will be much better to put the money in a trust account now and make use of the annual exemption or for larger amounts "start the 7 year clock ticking".

I am not a legal expert but I suspect the will should mention whether the contents of the account should be given to the beneficiary on death or if a new trustee should be appointed until the beneficiary is a certain age.

Edit: Instead of that the better option is to open the account(s) with two trustees, the grandparent and someone else who will carry out their wishes if the worst happens.

just to say that if you give over 3,000 per annum the IHT does NOT reduce over the seven years (tapering only applies if you have given away an amount over the IHT limit (i.e. over 325,000)