Holding/Investing money in Trust for children

slewis88

Hi
I am the executor of a will and as part of my duties I have to hold/invest money in trust for my two nephews and one neice until each reaches the age of 18 (their ages are currently 16, 14 and 12).
The amount to be held for each is approx £31,000.
Does anyone have any advice on where I can open such trust accounts, that will hopefully pay a decent amount of interest?
Many thanks in advance!
Cheers, Steve

dunstonh

A number of platforms offer will trusts but they are for investments. For savings, you are limited to banks. However, be prepared for the bank staff knowledge to be near zero on trusts.

Did the Will specify an age?

xylophone

Does the will leave the money to the children absolutely and without contingency ("indefeasibly vested")? - when they become 18 not if they reach the age of 18.

https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem1563

This would mean that each child is the beneficial owner of the money now and is only unable to access it by reason of age.

If so, you would therefore hold the money in bare trust for each child individually.

https://uk.virginmoney.com/virgin/savings/learn/childrens-accounts/

and see note under 16th birthday.

Do the children have CTF/JISA? It would be permissible for you as Trustee to make a payment up to the limit into such accounts.

If a CTF is held for the younger two, it would be possible for the full payment to be made in the CTF year, for the CTF to be transferred to JISA and for the full payment to be made into the JISA for the current tax year.

https://www.skintedmintedmum.co.uk/minted-blog/how-to-transfer-a-child-trust-fund-ctf-to-jisa-with-a-double-scoop-of-tax-allowance.html

The best JISA rate is currently available from Coventry Building Society.

slewis88

Hi thanks for responding!

Just checking the will again now, I see that no actual age was specified.... it just says 'a x% share of residue to my grandson [name] absolutely'

Another paragraph states that the Standad Provisions of the Society of Trust and Estate Practitioners (1st Edition) will apply, in case that is relevant?

So do I have to hold the funds until each is 18 years old, or another age?

Many thanks, Steve

slewis88

Hello, many thanks for this response, very helpful

Yes, I think the money was left absolutely and without contingency as the will says 'a x% share of residue to my grandson [name] absolutely'. So we need to hold the money in bare trust for each child individually?

So is that Virgin Money account that you highlighted a Bare Trust account? And are all children's savings accounts 'Bare Trust' accounts?

If the children do not currently have a CTF/JISA, can we open one for each of them?

Many thanks for your continued help with this!

Cheers, Steve

xylophone

It would seem that the money is indefeasibly vested so that it now belongs to each child absolutely.

However, a minor child cannot give good receipt for a bequest.

The money can be held in bare trust for each child as in my post above.

You could be the Trustee or you and a parent could be Trustees.

As Trustee (s) you might choose to release some money to the child/children, for example to the eldest of them for driving lessons when the time comes.

Each of them will have the absolute right to access and control at the age of 18.

xylophone

The Virgin Money account can be held in bare trust - see link.

It is possible to hold some fixed rate accounts in trust but you would need to check with the individual providers.

http://www.thisismoney.co.uk/money/article-1621507/Best-savings-rates-Fixed-rate-accounts.html

The eldest of the children can open a Coventry JISA for himself and you can pay in the full amount in this tax year and the following up to age 18.

https://www.coventrybuildingsociety.co.uk/consumer/product/savings/children/junior-cash-isa.html

The younger two (born 2003/2005) have CTF accounts already?

https://www.moneyadviceservice.org.uk/en/articles/child-trust-fund-accounts

See my previous concerning transfer of CTF to JISA.

It may be worth looking at Santander mini 123 in trust.

slewis88

Hi and thanks you again

Just two last questions: if we put money into the children's CTF/JISA, how can we show that we are holding the money on Trust (or don't we need to)? And if the 16 year old opens his own Coventry JISA, wouldn't he then have full access to the money (which, until he is 18, is contrary to the will)?

Many thanks again for all your help!
Cheers, Steve

xylophone

The CTF/JISA is managed by the "registered contact" (usually the parent) but the money belongs to the child and can only be accessed by the child when he or she reaches the age of 18.

The child can choose to control the JISA at the age of 16 but cannot access it.

The 16 year old can open the JISA and control it but cannot access it until the age of 18.

See links post 5

https://forums.moneysavingexpert.com/discussion/comment/73649139#Comment_73649139

slewis88

Ok fine, understood, thanks.
The amount I have to save for each child is approx £31,000, so we invest £4,128 this year (or double that if they have CTFs and not yet transferred) and put the rest into a savings account or savings bond that can be held on Trust?

slewis88

Hi
For your info, I just spoke with Virgin Money.
They told me that their Young Saver accounts cannot be opened as 'Will Trusts', but 'Personal Trusts' which means that if, when the child reaches the age of 16, I want to remain as a Trustee on the account, I will share half of the tax liability... so that's not really an option...