Account that will hold inheritance in trust for a child?

Rank_Outsider

Hello,

I've tried looking online for this but seem to keep running into info on Child Trust Fund accounts or finding accounts that are not suitable.

My child has been left money in a relative's will, with the stipulation that he cannot access it until he is 18 years old. I need to set up a bank account for this purpose. I don't know how much it will be exactly (it depends on the sale of a house), but is likely to be in the order of twenty to thirty thousand pounds.

Can anyone recommend an account (or even help me with what exactly I should be looking for!)? The accounts I've found online either have an upper savings limit of less than I'm looking for, are regular savers and don't take a large deposit, or don't seem to prevent the child withdrawing money before they are 18.

I don't think it can be an account that I, as a parent, can authorise withdrawal before he's 18 (although I will ask the solicitors handling the estate). Although I've seen advice that investments might offer the best return for a seven year old in this position, I am not comfortable with that level of risk and would prefer a savings account.

Thank you!

xylophone

The will leaves the money to the child absolutely and without contingency (ie he gets it when not if he becomes 18)?

In theory, any account that the provider permits can be held as "Joe Bloggs, Trustee for Master John Bloggs".

Many years ago, I held some fixed rate bonds on this basis as one of the Trustees for a minor.

Does the child have a CTF or JISA? If so, one possibility might be to deposit the £30,000 in eg a Nationwide Smart Limited Access account as Trustee for the child, moving the permitted amount into the CTF/JISA each year. This would be entirely in the spirit of access denied until age 18 although the child could control the account from age 16.

http://www.nationwide.co.uk/products/savings/smart-limited-access/features-and-benefits

JohnRo

Rank_Outsider wrote: »

Although I've seen advice that investments might offer the best return for a seven year old in this position, I am not comfortable with that level of risk and would prefer a savings account.

with 20-30K I'd at least consider investing some of it. Say 10% of the pot invested, the rest in deposit accounts. The downside is you may well find in 11+ years time that you desperately wish you'd made it 100% invested.

xylophone

with 20-30K I'd at least consider investing some of it. Say 10% of the pot invested, the rest in deposit accounts. The downside is you may well find in 11+ years time that you desperately wish you'd made it 100% invested.

The will, which is in effect the Trust Deed, may not allow an investment option.

http://www.osborneclarke.com/connected-insights/publications/the-powers-and-duties-of-bare-trustees/

dunstonh

You also need to be aware of the (relatively) new requirements of trusts in respect of FATCA. This can make the running of small value trusts onerous and costly. So, maybe the beneficiaries can agree to a change in the Will to all you to administer the money rather than being held in trust.

Although I've seen advice that investments might offer the best return for a seven year old in this position, I am not comfortable with that level of risk and would prefer a savings account.

Legally, it is not you that matters. It is the beneficiary. Failure to act in the best interests of the beneficiary can lead to action being taken against you. Using cash for 11 years probably has more risk than using risk based investments. Just different risks.

xylophone

So, maybe the beneficiaries can agree to a change in the Will to all you to administer the money rather than being held in trust.

DoV difficult where there are minor beneficiaries. See

http://www.rjcwills.co.uk/pdf/changing-a-will-after-death-fact-sheet.pdf

It would seem that this will be a bare trust, (assuming that will indefeasibly vests the money in the child now and the only reason that he cannot have it now is that he is under 18).

http://www.hmrc.gov.uk/manuals/tsemmanual/tsem1563.htm

It may be that the will does not permit investment of the monies by the Trustees - the OP can consult the solicitor.