Saving for Grandchild

English_Pensioner

We want to put some money away each year for our grandson, to be held in trust, with my wife and I as trustees (and or elder daughter when we die). As it will be in trust it will in due course be free of estate duty, provided that we don't exceed our annual gift allowance.
Now the question.
Is it possible by any means to hold it in trust for him beyond the age of 18? We fear, that if he is like his father, and has a large sum at that age, the first thing he will do is to go and buy a powerful car, rather than think of his future. We would like to hold it in trust untill he is 21, or even later, with the trustees having discretion to release the money if they felt it appropriate, eg for University fees.
Can this be done?

Cautious_Investor_3

Hi

1. You can give away amounts up to the annual gift allowance and it is immediately outside your estate whether it is paid into a trust or not, that's the whole point of the allowances

2. I'm not sure of the answer to the 18/21 question. This is probably a question for a Solicitor.

Could you hold the money in your own name and simply ear mark it for your grandson or is this impractical given ages etc?

The Cautious Investor

Reaper

Are you thinking investments or savings? If you are thinking investments then Baille Gifford will do everything you are after. They will set up a Bare Trust for you without involving solicitors and you can choose the date the trust will run to which can be anything you want (though I did see one web site claiming the child could challenge this in the courts and gain control at 18. Sounded pretty unlikely though).

Details here: http://www.bailliegifford.com/pages/UKPersonalInvestors/Children/InvestingforChildren.aspx
Don't worry about the bit on the page I link to that says it runs to age 18. The application form lets you specify whatever you want.

Primrose

oops - my post has disappeared. I'll try again.
Whatever route you go, I suggest you make it a condition that your daughter does not reveal to her son that a trust fund has been set up for him. I believe it to be a huge mistake to let a child grow up thinking there's a nice wadge of cashing waiting for him. It can prove a real disincentive to making them understand that they have to succeed by their own efforts and stand on their own two financial feet. I can give you an example of what happened in my own wider family circle.
One teenager who had a trust fund went on a wild spending spree and ran up thousands of pounds of debt on credit cards. The situation became so serious that bankruptcy was looming and the trustees felt obliged to bail her out and settle her debts from the trust fund. At the age of 25 when the trust fund was due to mature, she ended up with nothing. Another child covered by the same trust fund had the money released to him early, by agreement of the trustees, to use as a deposit for a house, which was what the donor of the legacy would have regarded as a sensible use for the money.