inheritance for a 16 year old

SaraTaylorReed

my 16 year old daughter will inherit c£50k before her 17th birthday, the will stated it must remain in Trust until she is 21, are there any specific funds for this sort of sum please? medium risk but with the ability for me to change that. Thanks

Linton

Investing medium risk for 4 years gives some chance of losing money which could be upsetting. I suggest you would be better advised to put it in a fixed term savings account.

Grumpy_chap

SaraTaylorReed said:

my 16 year old daughter will inherit c£50k before her 17th birthday, the will stated it must remain in Trust until she is 21, are there any specific funds for this sort of sum please? medium risk but with the ability for me to change that. Thanks

Exactly how has the will been written to specify the type of trust?  It is not always possible to withhold the funds.

MX5huggy

The investment period doesn’t have to be the 4 years it can be anticipated that she would not spend it at 21. 

Does it have to be 21? Maybe she is off to uni and some money would be useful. She could use it as a deposit on a student let house for her 2nd year onwards for example. 

Albermarle

SaraTaylorReed said:

my 16 year old daughter will inherit c£50k before her 17th birthday, the will stated it must remain in Trust until she is 21, are there any specific funds for this sort of sum please? medium risk but with the ability for me to change that. Thanks

There are no specific funds for any sum. Using a standard investment platform you can usually invest anything from £25 to Millions. As said above a couple of things matter. 
Time scale - Will she want to withdraw all the money in 4 years , or some/none of it? Taking into account the comment that she may be able to access it earlier if the trust/will was not written exactly correctly.
Risk tolerance- What level of loss can you tolerate, in case the investment does not do as well as hoped?

The two issues are tied together because normally the longer the investment is held, the less the chance of a loss and the more chance of a good gain.

Do not forget it is not necessarily all or nothing . Some could be invested ( for the longer term ) and some held in a savings account ( for the shorter term).

xylophone

the will stated it must remain in Trust until she is 21,

What exactly does the will say?

You may need to consult the solicitor who drafted the will.

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

 If the  bequest has "indefeasibly vested"  in your daughter (left absolutely and unconditionally on a "when"  not "if" she turns 21), then this  is likely to be  a bare trust.

It is very important to establish whether or not the trust is bare both for  reasons of access and taxation treatment.

https://www.gov.uk/trusts-taxes/types-of-trust

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

You  are the Trustee?

You will need to check whether the account provider you choose offers a Trustee option.

One BS that does is the Skipton.

Malthusian

Albermarle said:

Time scale - Will she want to withdraw all the money in 4 years , or some/none of it? Taking into account the comment that she may be able to access it earlier if the trust/will was not written exactly correctly.

If this is in reality a bare trust, it doesn't necessarily mean that the Will was written "incorrectly". The only way to make the stipulation about age 21 legally meaningful is to add other potential beneficiaries, which creates an inherent risk that the daughter doesn't get the money.

Ultimately the daughter should be driving the investment decisions. She may be a minor but she will be the one bearing the (paper) losses if she wants to take money out at 18 and the markets have gone down.

Some might say the legally correct course of action (if this is a bare trust) would be to put it in cash for two years and then hand it over at 18, which would eliminate any practical risk of being accused of mismanagement for the OP.

But if both the OP and her daughter are confident that the money will be invested for the long term (e.g. for future house purchase) they may have better options.

@OP: If your username is your real name I would change it ASAP. Your daughter's friends don't need to know she owns £50k.

Malthusian

Good point, I stand corrected.