Paying money from will to a minor

flightinfo

My understanding is that if children receive a small inheritance and the executor is looking after the money, the money is put in trust for the chlld until he/she is 18.

If the money is paid to a parent on behalf of the child, can the parent invest it immediately into an account in the child's name (an account they already have) or does a trust account have to be set up which cannot be accessed until the child is 18? (The terms of the will allow the money to be paid to a parent on behalf of the child and as far as I am aware - I will, of course, check - there was nothing written in the will to state that the child must not receive the money until aged 18.

Thanks for your help.

Kiboko

When my Dad died his will stated that from my share I was to make provision as I saw fit for his grand-daughters (my daughters) I put $500 each into their saving accounts and a larger sum each into accounts in each of their names where I save towards possible university education or their first home. This money will be available to them on their 18th birthdays and they will be able to spend the money on whatever they want. However there wasn't a specific amount left to them, I suspect if I had been on benefits I wouldn't have been able to do what I did, but it was as directed by the solicitor within the terms of the will, it was up to me as to how much I put aside for them.

flightinfo

Thanks for your reply Kiboko. Our query is slightly different in that it is a set amount given to all the nieces and nephews (some of whom are over 18). It would appear then that we can put it in a savings account for them for the future but not have to set the account up as a trust.

Mojisola

flightinfo wrote: »

The terms of the will allow the money to be paid to a parent on behalf of the child and as far as I am aware - I will, of course, check - there was nothing written in the will to state that the child must not receive the money until aged 18.

If that's the way the will is written, the deceased must have trusted the parents to use the money on behalf of the child.

It would be possible to spend it on things they might not have otherwise been able to do such as expensive school trips.

I would caution to think any spending through carefully because there's a good chance that the parents will be called to account for the spending when the youngster reaches adulthood!

Grumpygit

My dd was left £5k in a will and I bought premium bonds with it - they are in my name at the moment but she receives into her bank account any winnings that may arise.

it would probably depend on how the will was worded, although you should look at the tax consequences of interest received on their bank accounts as you may be liable if the amount mounts up.

flightinfo

Thanks for the replies.

Just to clarify, if the inheritance is paid to the parent on behalf of the child, the parent would then pay the same amount into an account in the child's name - either to an existing savings account or a new one opened. The money would not be used by the parents. The amount involved would not have any tax consequences for the parent under current rules.