Childs inheritance......

Brighty

Yorkshireman99 wrote: »

Why would any decent parent not tell them?

All kids are different and not all would be responsible with a large sum of money on their 18th birthday, they could blow it all on haribos, drugs, fast cars, who knows. The parents may think it's better they wait till they're 21, as was the wishes of the person that left them the money.

Yorkshireman99

Brighty wrote: »

All kids are different and not all would be responsible with a large sum of money on their 18th birthday, they could blow it all on haribos, drugs, fast cars, who knows. The parents may think it's better they wait till they're 21, as was the wishes of the person that left them the money.

You may be right but the law says they are entitlked to the money at 18. In the extreme the child could sue for the loss of the money over the three years. I am noit suggesting they should ,but there is no legal reason why they should wait. Being dishonest with the child is not a good way to proceed.

Brighty

Yorkshireman99 wrote: »

You may be right but the law says they are entitlked to the money at 18. In the extreme the child could sue for the loss of the money over the three years. I am noit suggesting they should ,but there is no legal reason why they should wait. Being dishonest with the child is not a good way to proceed.

I know legally the child is entitled to the money at 18, but does that necessarily mean they HAVE to be given it at 18, even if they don't ask/demand it and the trust specifies 21?

Interested in this as i'm trying to get our wills sorted at the moment and need to get the nitty gritty of trusts sorted.

My kids are only 4&6, so i have no idea what sort of 18yr olds they'll turn out to be, especially as my eldest has learning difficulties, speech/language delay, possible ASD, will he even have to mental capacity to manage his own money as an adult?. IF my brother, who i own some BTL's with, was to drop dead tomorrow, leaving everything to me, then me and the wife get hit by a bus the next day, there's an estate of a smidge over £1million that would just get handed to my 2 monsters the minute they hit 18. Scary thought of what messes they could end up in

Yorkshireman99

Brighty wrote: »

I know legally the child is entitled to the money at 18, but does that necessarily mean they HAVE to be given it at 18, even if they don't ask/demand it and the trust specifies 21?

Interested in this as i'm trying to get our wills sorted at the moment and need to get the nitty gritty of trusts sorted.

My kids are only 4&6, so i have no idea what sort of 18yr olds they'll turn out to be, especially as my eldest has learning difficulties, speech/language delay, possible ASD, will he even have to mental capacity to manage his own money as an adult?. IF my brother, who i own some BTL's with, was to drop dead tomorrow, leaving everything to me, then me and the wife get hit by a bus the next day, there's an estate of a smidge over £1million that would just get handed to my 2 monsters the minute they hit 18. Scary thought of what messes they could end up in

Trustees are reqired to act in a proper manner and that means being honest with the beneficiaries of the trust. IMHO it would be dishonest not to tell the children upon, or indeed, shortly before their majority. You need to get urgent professional advice on your wills and about the question of trusts for your children. This could also, in some circumstances, mean substantial IHT savings. With a potntially disabled child a sepatate trust that will support them beyond their majority might be in order. You need to see a solicitor who is a STEP member i.e. a trust specialist.

Brighty

Yorkshireman99 wrote: »

Trustees are reqired to act in a proper manner and that means being honest with the beneficiaries of the trust. IMHO it would be dishonest not to tell the children upon, or indeed, shortly before their majority. You need to get urgent professional advice on your wills and about the question of trusts for your children. This could also, in some circumstances, mean substantial IHT savings. With a potntially disabled child a sepatate trust that will support them beyond their majority might be in order. You need to see a solicitor who is a STEP member i.e. a trust specialist.

Thanks Yorkshireman, yes that's what i was intending to do, i've had quotes, but we are putting it off at the moment because we have no idea who we want to be guardians of the kids, which will affect who we choose to be trustees. Must get that sorted, but its a tricky one.

Keep_pedalling

Brighty wrote: »

Just out of interest, are parents, assuming they are the trustees, obliged to tell children that the money even exists? Could they just sit on it in silence and only tell the kids when they hand the cash over at 21?

If they put it in a JISA they don't really have a choice, because the child gets control of the account at 16 and can withdraw funds from 18.

With the amount of money we are talking about a JISA is the simplest solution, with best chance of some decent growth over the next 16 years.

SevenOfNine

j88kln wrote: »

My Grandad passed away last year and the will has finally been sorted out.

However, he has left money for his grandson (my son) who is only 2 years old. The solicitor has said that the funds will be available for my son when he turns 21 years old. Meanwhile the solicitors will look after the payment.

I have tried to get in touch with the solicitors after they emailed this to me, however I have not had any luck.

The question that I am looking to ask is - will the money gain interest for the next 19 years? and if so, will my son get the interest or will the solicitors?

I thought it was a little bit weird that they are holding the funds as my son has an ISA which nobody can access until he turns 18 years old, which I was going to put the funds in to. My grandad used to pay in to this for my son at irregular intervals anyway.

Any help in this matter is much appreciated

Andy

You can obtain copies of relevant documents here https://www.gov.uk/wills-probate-inheritance/searching-for-probate-records for the princely sum of £10. I would suggest you do that first & see what is contained in this Will.

Unless I've missed something, you haven't exactly said who the trustees of your son's inheritance are, there's an assumption that it must be the solicitors given that they've stated they will "look after the payment" - check they ARE the chosen trustees. It's a bit vague at the moment.

You've had "no luck" getting in touch with these solicitors, keepers of your son's inheritance. So how much additional luck might you have in 19 years if you've had no luck now? Either insist on a response within a set timescale or start a formal complaint. An email telling you "son has inherited we'll be looking after it until 21" - not good enough.

You need to find out a whole lot more information before concerning yourself with interest rates & entering into squabbles regarding inheritance age. It may be that it's still early days for the solicitors to give you all the finer details (but probably not), so get a copy of this Will & see what terminology has been used regarding this inheritance.

securityguy

Yorkshireman99 wrote: »

You may be right but the law says they are entitlked to the money at 18. In the extreme the child could sue for the loss of the money over the three years. .

No they couldn't. Saunders v Vautier means that _if_ someone competent wishes to wind up a bare trust of which they are the sole beneficiary (or more generally a group of beneficiaries all of whom are competent want similarly) _and_ they go to a court _then_ then court has no option but to agree. There is no obligation to inform, and trusts with different lengths on them are perfectly valid; it's just that they are challengeable, and the presumption of the court would be to dissolve them.

To answer another point that is raised, Saunders v Vautier may date back to 1841, but it's worth quoting its key holding in full:

I think that principle has been repeatedly acted upon; and where a legacy is directed to accumulate for a certain period, or where the payment is postponed, the legatee, if he has an absolute indefeasible interest in the legacy, is not bound to wait until the expiration of that period, but may require payment the moment he is competent to give a valid discharge.

Note the key word "competent". That is, in general, "of age" - and the law's general view of being of age has shifted from 21 to 18 over the last forty or fifty years. However, it still stands with the meaning in plain language in law, and therefore trusts set up for people who do not have mental capacity to make sound judgements would still be valid at 19, 22 any other age (in terms of Saunders, at least).

All Saunders is saying is that a bare trust cannot be used to keep money from someone competent to ask for it.

It's also worth pointing out that Saunders requires that all beneficiaries agree and must be able to agree, so it may not apply to some discretionary trusts where the eventual beneficiaries are not a well-defined set (ie, where the eventual beneficiary does not have "an absolute indefeasible interest in the legacy"). However, such trusts are much more expensive to run and much more prone to fraud and malfeasance, so using one to defeat Saunders would be silly.

Evidence that people left money at 18 are more irresponsible with it than they are at 21 or 25 is thin on the ground: it sounds like it ought to be true, but whether it actually is seems harder to unpick. It does seem a shame that so many parents have such little faith in their own parenting.