Account held in trust

Flubbergit

My husband died unexpectedly a few months ago and left an insolvent estate which I am obviously not administering as there is nothing to administer. I have recently received a letter from his bank about an account that he held in trust for his daughter. I had presumed the bank would liaise with his daughter’s mother about this as she is very young. The bank have said that I need to tell them what I want done with the account - have a cheque made out to his daughter for the amount in the account (not really an option as she is very young), have the money transferred in to an account in his daughters name or have a new trustee account set up and have the money deposited there (also not an option as I am not a parent/guardian and am highly unlikely to get permission to do this from her mother). 

My husband was very clear that the money in this account was for his daughter when she is older, 18+. I have asked her mother to set up a junior ISA so the money will be in his daughter’s name only and can’t be accessed until she is 18 but she seems reluctant to do this for some reason and relations are already very strained following his death. 

I’m just looking for advice on where I stand with this. My husband did not leave a will so it is really only my word that he wanted this money to be given to her when she is older- am I wrong to request that a certain type of account be set up so that his wishes can be respected in this regard or do I need to put up and shut up and have the money transferred in to an account that her mother would have access to and control over?  

xylophone

My husband did not leave a will so it is really only my word that he wanted this money to be given to her when she is older-

This is not exactly the case if your husband was holding the account in bare trust for his daughter (as appears to be the case as the bank has clearly taken the view that your stepdaughter is the beneficial owner of the money in the account).

Were it the case that the account was held in your husband's own name alone,  then regardless of his intentions, it would form part of his estate and used to pay his creditors.

The beneficiary of a bare trust has the absolute right to access and control of the funds at the age of 18 (16 in Scotland).

I think you might be well advised to write to your stepdaughter's mother explaining that your late husband was the Trustee of an account of which his daughter was the beneficiary and that you will only be able to release the money to an account held in her name in trust.

I am assuming that the sum in question is £9000  or under since you suggest the option of a JISA.

You might once again suggest that  either she opens a JISA and provide you with the details so that you can organise a bank transfer or alternatively   that she opens an account in bare  trust for her child and provides you with the details.

An example (sums of £5000 or under) https://www.bathbuildingsociety.co.uk/personal-savings/accounts/childrens-accounts/junior-saver/

You will see from the link  below that a much better interest rate is available on a JISA - you could point this out to the child's mother.

https://www.thisismoney.co.uk/money/saving/article-1604879/Best-savings-rates-Telephone-postal-phone-accounts.html

If the child is very young, a stocks and shares account either within or outside a JISA could offer better returns.

I should think that as the child's stepmother and de facto administrator of your husband's estate, it could be possible for you to open a bare trust account for her?

The bank appears to be suggesting that this could be the case?

Flubbergit

When I spoke to the bank about whether I could set up a new account with myself as trustee I couldn’t really get a straight answer. I’ve looked at a variety of children’s savers accounts and they all seem to say that only the parent or guardian can open an account on behalf of the child. I did find one account with Halifax I think it was that I could open an account but I would need the permission of her parent and I sincerely doubt I would get that. Maybe I’m best phoning the bank again and exploring a trustee account in greater detail. I just want to respect his wishes and do right by my stepdaughter but my concern is that if an account is opened with her mother as trustee the money will be spent over the years and my stepdaughter will not know that her father had this money saved for her.

xylophone

I am not so sure that you would need the parent's permission if you  were able to open the account as administrator (even if only de facto)  of your husband's estate?

It is clear that the bank regards you as the authorised person/ person responsible for decisions concerning these funds  - it is certainly worth checking if you can take over as Trustee on the account.