Property funds in child accounts

cherry76

Very interesting thread.  I do save for my grandson every month for last 8 yrs. My daughter is the trustee but have told her she can take money from his account in emergency.  From reading members forum she is not allowed to do that.  E.G if she needs a new boiler or central heating why cant she take money from the account. I do not understand why the other person cannot use her daughters account as proof of fund!  Her daughter is going to benefit as well. Other person I would ask the solicitor!

greatcrested

cherry76 said:

Very interesting thread.  I do save for my grandson every month for last 8 yrs. My daughter is the trustee but have told her she can take money from his account in emergency.  From reading members forum she is not allowed to do that.  E.G if she needs a new boiler or central heating why cant she take money from the account. I do not understand why the other person cannot use her daughters account as proof of fund!  Her daughter is going to benefit as well. Other person I would ask the solicitor!

There are several factors

* adults putting money into child-only accounts may be doing so to a) benefit from higher interest rates and b) avoid paying tax on the interest. a) is defrauding the bank (which would pay lower interest if the money were in a standard account) and b) is tax evasion

* since the money has been specifically given to the child (eg your monthly gifts), the trustee must use the money soley for the child. If your intention had been to give money to 'the family' (eg to spend on new boiler, a family holiday, whatever), then you should have give it to the adult(s) to save/spend as needed by them ot the family.

* obviously, what constitutes using the money to benefit the child is dependant on circumstances. Child's future universiy fund, wedding, house deposit etc are clear easy examples. But for use earlier during childhood it becomes a matter of interpretation. It could be that buying new clothes would be appropriate, or ballet lessons. But the point is the Trustee(s) should be clearly using it for the child.

strawb_shortcake

cherry76 said:

Very interesting thread.  I do save for my grandson every month for last 8 yrs. My daughter is the trustee but have told her she can take money from his account in emergency.  From reading members forum she is not allowed to do that.  E.G if she needs a new boiler or central heating why cant she take money from the account. I do not understand why the other person cannot use her daughters account as proof of fund!  Her daughter is going to benefit as well. Other person I would ask the solicitor!

We've always put money into our children's accounts that they either can't access or haven't told them they can access. The only exception is when one Son received £1500 compensation for a car accident, a condition was that we had to keep it safe until he was 18. On that occasion we did allow him to take £100 out of his other savings account to spend on himself. 

My Niece saves for her children through a child's saver account, she has withdrawn money to pay for things he needs - like when he broke his cot. I can't help think though that parents should be putting money aside separately for such things, an 18 month old child shouldn't really be paying for his bed.

wilfred30

SDLT_Geek said:

@SuperCommuter Did you do the decent thing and recognise that the money in your daughter's account belongs to your daughter?  Does that mean you are having to borrow funds for your purchase?

Now, you don't really expect an answer to that question do you?  At least, not in the affirmative anyway 

AdrianC

cherry76 said:

Very interesting thread.  I do save for my grandson every month for last 8 yrs. My daughter is the trustee but have told her she can take money from his account in emergency.  From reading members forum she is not allowed to do that.  E.G if she needs a new boiler or central heating why cant she take money from the account. I do not understand why the other person cannot use her daughters account as proof of fund!  Her daughter is going to benefit as well. Other person I would ask the solicitor!

Let's say the child was older.
Would the mother expect to unilaterally raid a teenage child's savings to pay for the boiler?

frogglet

I opened accounts for my children, putting in any money they got for birthdays etc. I only gave it to them when they were 16 as a nice surprise.
It would never have occurred to me to plunder their funds. To pay for anything. Or put my own savings in there.
I cant believe people think its OK.
My other half told me when he was young he would find his piggy bank raided by his parent either to put in the leccie meter or go to bingo and how disappointed and upset he was.

lookstraightahead

frogglet said:

I opened accounts for my children, putting in any money they got for birthdays etc. I only gave it to them when they were 16 as a nice surprise.
It would never have occurred to me to plunder their funds. To pay for anything. Or put my own savings in there.
I cant believe people think its OK.
My other half told me when he was young he would find his piggy bank raided by his parent either to put in the leccie meter or go to bingo and how disappointed and upset he was.

I think there is a difference between taking money out of an account that is in another person's name, as it is when you open bank accounts for your children.

However, if the money is in the house and it is a decision between my child freezing of the cold or having warmth, I think I might hunt for that few quid. 

Its a nice situation to be in when you don't have to make that choice. Some people have questionable morals I agree, some people have to make very difficult decisions.

Ive been there, thankfully years ago, with school shoes. My daughter had a hole in hers and I asked my mum if, for her birthday, she would buy her new shoes. 

noitsnotme

Anybody accessed the Telegraph article yet?  I’d be interested to see Martin Lewis’s take on it.

https://www.telegraph.co.uk/finance/personalfinance/investing/11286926/Martin-Lewis-the-eight-questions-Im-always-asked-about-childrens-savings.html

ptork66

noitsnotme said:

Anybody accessed the Telegraph article yet?  I’d be interested to see Martin Lewis’s take on it.

He says, "If the money is in a child's name, it's their cash. [...] For younger children it's quite easy for parents to use their cash; for older ones, you would need their permission. [...] As for whether it is legal to do so, I've consulted lawyers who, as is often the case, had mixed views. Some say it is criminal fraud, others say there's nothing in practice to stop it."

noitsnotme

ptork66 said:

noitsnotme said:

Anybody accessed the Telegraph article yet?  I’d be interested to see Martin Lewis’s take on it.

He says, "If the money is in a child's name, it's their cash. [...] For younger children it's quite easy for parents to use their cash; for older ones, you would need their permission. [...] As for whether it is legal to do so, I've consulted lawyers who, as is often the case, had mixed views. Some say it is criminal fraud, others say there's nothing in practice to stop it."

Thanks.  As I thought, no definitive answer and I doubt it’s something that’s been tested in a court.