Inheritance left to my (underage) son from my grandmother - To be held in Trust

DiggerUK

AnotherJoe said:

There's a big difference between someone with a limited life span who needs the money to pay for care, and for whom it doesnt matter if it declines due to inflation, and a 11 year old.

The same due diligence is required irrespective of age and circumstances. 

The law demands  edit, expects you not to act recklessly, carelessly, fraudulently, without due diligence and with a disregard to your responsibility..._

wmb194

Particularly for a relatively small amount of money like this, short of stealing it the cops won't be coming knocking whatever you do, savings account, Premium Bonds or otherwise. It's a good idea to consider a diversified equity investment, though.

dunstonh

That is just plain wrong. Mrs.D and her cousin are deputies for their aunty who is in permanent care. You should stop misleading posters.

You are not the OP and your situation is not the same.

DiggerUK

dunstonh said:

That is just plain wrong. Mrs.D and her cousin are deputies for their aunty who is in permanent care. You should stop misleading posters.

You are not the OP and your situation is not the same.

The legal principles are the same, you are deliberately misleading the OP. Your post is a non sequitur. 

You present an argument that attempts to make the OP's option of buying PB's illegal, that is false. There is nothing proscriptive to prevent the OP doing just that, they could also put it in a 0.1% Savings Account, deposit it in a 0% current account, buy gold, put it in the existing CTF or open a JISA.

All I see your post attempting to do is  propagandise to all and sundry that they cannot take control of the finances of them and theirs. That is beyond deceitful, it's an attempt to put a newbie in their place..._

bigadaj

Whilst it's easy to dismiss premium bonds I'm not sure that it's that poor a choice. We've got equities still at near all time highs, with valuations arguably even more stretched than they were pre covid. Bonds with no yield and risk of capital loss and virtually no return on cash. Also 10 years isn't that long a period to allow recovery from any crashes that may occur in the near future.

getmore4less

https://www.nsandi.com/premium-bonds

Say not a suitable investment for a trust. 
They become the child's at 16 which a problem for a will trust for a minor. 

xylophone

I think the OP's son is probably rising 12.
Despite the age 21 mentioned in the will if this is a bare trust he has the right to access and control at age 18.
If I were the OP I'd go the CTF to JISA route as described in my previous.

dunstonh

You are talking 10 years.   So, inflation will turn £10,000 into around £6,700 in spending power if there was no return.

Premium bonds have no investment return and no interest.  They are a lottery entry.   And smaller value "entries" tend to suffer worse than those with £30k+ in premium bonds.  Even if you manage the average (which statistically is unlikely with £10k, then the value of the PBs is likely to go down in real terms over 10 years.

bigadaj

It's comforting to know that an advisers confident of outperfoming inflation on that sum over that period after fees.

Malthusian

wmb194 said:

Particularly for a relatively small amount of money like this, short of stealing it the cops won't be coming knocking whatever you do, savings account, Premium Bonds or otherwise. It's a good idea to consider a diversified equity investment, though.

Of course the police wouldn't be knocking, mismanagement of other people's trust money is a civil matter. However, the beneficiary would have the right to sue you for their loss if you failed to invest their money as a prudent businessperson would.

bigadaj said:

Whilst it's easy to dismiss premium bonds I'm not sure that it's that poor a choice. We've got equities still at near all time highs, with valuations arguably even more stretched than they were pre covid. Bonds with no yield and risk of capital loss and virtually no return on cash. Also 10 years isn't that long a period to allow recovery from any crashes that may occur in the near future.

Trustees should not be attempting to time the market with other people's money. No global stockmarket crash in history has taken 10 years to recover from (either the dotcom crash or the Great Depression is longest at around 6 years). There is still an immeasurably small chance that it could happen (records are made to be broken), but no court would find a trustee liable if they invested a beneficiary's money in a diversified non-geared stockmarket investment and it made a loss in ten years.

They would however almost certainly find the trustee liable if they dumped the money in Premium Bonds. (In the unlikely event it ever went to court, of course. But "you might get away with it" is bad advice.)

bigadaj said:

It's comforting to know that an advisers confident of outperfoming inflation on that sum over that period after fees.

If they weren't they should find a new job.

An adviser wouldn't offer ongoing advice for a sum of that size (except as a loss-leader), but nothing is stopping the Trustees from taking transactional advice for say 5 - 10% of the fund value, after which the trust fund would be invested in a suitable multi-asset solution for the next ten years. And if the fund didn't outperform inflation after 10 years even after the cost of transactional advice, we are verging on an apocalypse scenario.

They don't need to pay for transactional advice, because it's very easy to do without it and even transactional advice would be disproportionately expensive, but the option's there and meets the Trustee's statutory duties.