Are Childrens Savings Protected from ex partner?

cheshirecheapskate

Hi,

I am convinced this is a moral issue but figured I would ask the experts on this subject.

My daughter who is now 12 has a child savings account, which was opened by her grandfather when she was 2. I was regularly transferring money into the account for nearly 8 years to ensure she had a small nest egg once she had finished school and could use the money for uni, car etc... However I have learnt that the mother (we haven't been together for 7yrs) has been accessing the account and has removed approximately 75% of the value. (approx. £3500) This can only be done with the permission of the grandfather (her step dad) although it is clear now that he has simply allowed her to transfer money out of it at will.

I am assuming this is simply a case of, I shouldnt have put money into an account that access was controlled by either myself or was 'locked' until my daughter was 18 but am wondering if there is any legal obligation the grandfather should have undertaken prior to removing the money.

Cheers
T

xylophone

Was the grandfather holding this account in bare trust for your child or was this simply an account in his name that he regarded as set aside for her use?

The account might have been "John Smith in trust for Mary Smith" which is quite clear.

However, it might have been John Smith re Mary Smith which is less clear cut since it might have been regarded as merely a designated account. http://www.taxinsider.co.uk/763-The_Bare_Essentials_Bare_Trusts.html

http://www.candidmoney.com/askjustin/809/difference-between-designated-accounts-and-bare-trusts

https://www.gov.uk/trusts-taxes/types-of-trust

However, if the money in the account has always been regarded as the child's own money, the R85 was completed in the child's name etc, and especially as you were contributing money to the account for your child, it seems you have a strong case for maintaining that the account was held in bare trust.

The fact that the money was the child's and money was provided by you might have its own considerations however, because of the "£100 rule" http://bank.virginmoney.com/savings/learn/childrens-accounts/

All that said, if the grandfather was the Trustee it was he who had access to and control of the accounts - he could argue that the money was being used for the child's benefit, even though you expected it to be held in trust until she was 18.

It would seem that there is little that can be done under the current set up? If she is eligible for a JISA (which seems likely if she is already 12), and you want her to have money at this time, best to explore setting one up for her? Who has parental responsibility?https://www.gov.uk/junior-individual-savings-accounts/overview £100 rule does not apply to CTF/JISA.

The Halifax offers an excellent rate if the person with parental responsibility also holds an account with them. http://www.halifax.co.uk/isas/

ses6jwg

I'd take matters into your own hands.

Unfortunately ex partners cannot be trusted in most circumstances and it is better to do things completely seperately as has been proven here.

I would certainly broach the subject with her, carefully. but in reality there is very little you can do, if the money has gone.

A good start is the Halifax regular saver at 6% from £10 per month. You will need your childs birth certificate to open it. You can buy a copy from the registry office for under £10.