Trustee Advice Please

tightgit_2

My children are about to inherit a sum of approx £25,000 from the death of a relative. My husband and I have been named as trustees for their money.
It is to be held in trust until they are 21. I have tried to google information about this without success.
What I would like to know is where would be a safe place to put the money and how can I make sure that they will not be able to use it until they are 21?
Also I was wondering if we had the right as trustee's to prevent them having it until say 25 which I feel would be a better age to have access to it?

RAS

tightgit wrote: »

My children are about to inherit a sum of approx £25,000 from the death of a relative.

Each or between how many?

tightgit wrote: »

My husband and I have been named as trustees for their money.
It is to be held in trust until they are 21.

Is the trust discretionary or does it indicate a purpose?

tightgit wrote: »

I have tried to google information about this without success.
What I would like to know is where would be a safe place to put the money and how can I make sure that they will not be able to use it until they are 21?

A lot depends ont he T&Cs attached to the Trust.

tightgit wrote: »

Also I was wondering if we had the right as trustee's to prevent them having it until say 25 which I feel would be a better age to have access to it?

Very much doubt it.

claretmatt

tightgit wrote: »

What I would like to know is where would be a safe place to put the money and how can I make sure that they will not be able to use it until they are 21?

You have legal responsibility to manage the trust assets and carry out the settlor’s instructions. Part of this would be to hold the money until age 21.

tightgit wrote: »

Also I was wondering if we had the right as trustee's to prevent them having it until say 25 which I feel would be a better age to have access to it?

You will always as a parent be able to direct your children towards making the right decisions so I am sure that the money will be spent wisely on a car, house deposit or university fees.

I would take into account the tax situation as it is higher for trusts than individuals plus you may have to self assess for the trust. I would seek professional tax/financial advice

tightgit_2

RAS wrote: »

Each or between how many?




Is the trust discretionary or does it indicate a purpose?




A lot depends ont he T&Cs attached to the Trust.



Very much doubt it.

Two children.

There is no trust, The will just said to be held in trust until they reach 21

tightgit_2

claretmatt wrote: »

You have legal responsibility to manage the trust assets and carry out the settlor’s instructions. Part of this would be to hold the money until age 21.



You will always as a parent be able to direct your children towards making the right decisions so I am sure that the money will be spent wisely on a car, house deposit or university fees.

I would take into account the tax situation as it is higher for trusts than individuals plus you may have to self assess for the trust. I would seek professional tax/financial advice

Where should the money be held?
The solicitor who was an executor just said that it should be put in a building society for them.

I can't put the money in my name as it would affect my benefits and If I put it in a child's account, I believe that once they reach sixteen it would have to be transferred into their names giving them access to it before 21.

The money is not in a trust.

gratefulforhelp_2

Can you buy a fixed-term bond with it? You can get them for long periods of time e.g 10/15 years.

tightgit_2

gratefulforhelp wrote: »

Can you buy a fixed-term bond with it? You can get them for long periods of time e.g 10/15 years.

Maybe. I will look into that.

I want to make sure that it won't be taken into account for them until they reach 21 as per the Will, so that it doesn't affect grants/benefits etc.

claretmatt

tightgit wrote: »

There is no trust, The will just said to be held in trust until they reach 21

A trust does not need to be a written document it can be established on the basis that three factors have been met:-

1. Was there an intention of the settlor to make a trust - you mentioned the relative wanted the money to be held in trust for your children until age 21 so the intention is there.

2. Is there precise details of what the trust will hold. You have mentioned a monetary amount of £25,000 so this is precise and absolute

3. Are there clear beneficiaries - your children which I assume have been named.

So based on the above there is a trust in place therefore any accounts should be opened in the name of "Tightgit child 1 Trust" and "tightgit child 2 Trust". This will make it clear that the money is not yours and therefore should not affect your grants and benefits.

As mentioned previously there are tax and self assessment areas that need to be fully considered before you do anything.

There are a few options - you can "bust the trust" which based on what you said might not be good for your benefits or you can find an investment vehicle which minimises the tax liability and self assessment requirements.

Just out of interest how old are the children?

tightgit_2

claretmatt wrote: »

A trust does not need to be a written document it can be established on the basis that three factors have been met:-

1. Was there an intention of the settlor to make a trust - you mentioned the relative wanted the money to be held in trust for your children until age 21 so the intention is there.

2. Is there precise details of what the trust will hold. You have mentioned a monetary amount of £25,000 so this is precise and absolute

3. Are there clear beneficiaries - your children which I assume have been named.

So based on the above there is a trust in place therefore any accounts should be opened in the name of "Tightgit child 1 Trust" and "tightgit child 2 Trust". This will make it clear that the money is not yours and therefore should not affect your grants and benefits.

As mentioned previously there are tax and self assessment areas that need to be fully considered before you do anything.

There are a few options - you can "bust the trust" which based on what you said might not be good for your benefits or you can find an investment vehicle which minimises the tax liability and self assessment requirements.

Just out of interest how old are the children?

Thanks for your reply.

It was not a precise amount it was 1/6th of the house sale for each child. The house has been sold, so their share will be approx £25,000.

Yes they were named as beneficiaries.

With regard to tax, are they not entitled to be tax free on any interest it will make bacause they are not working?

Will it affect their grants, benefits even though they won't have access to it until they are 21?

Can you suggest an investment vehicle which minimises the tax liability and self assessment?

They are 14 and 17.

Thanks.

claretmatt

tightgit wrote: »

With regard to tax, are they not entitled to be tax free on any interest it will make bacause they are not working?.

In broad terms the answer is no as the monies are held in trust.

tightgit wrote: »

Will it affect their grants, benefits even though they won't have access to it until they are 21?

The money doesn't actually belong to them until they are 21 so from my understanding it would have no affect on grants and benefits

tightgit wrote: »

Can you suggest an investment vehicle which minimises the tax liability and self assessment?

Unfortunately owing to my job status, the forum rules and the brief info you have given I am not allowed to make a recommendation. I'm sorry as would love to help more

photodgm

Have a look at NS&I National Savings & Investment. I think a bond from them may solve any tax issues (may not be the highest rates available but should be safe) I'm think you can set a bond up with them, with you controlling the bond and any re-investment for the benefit of someone else.