Inheritance cheques in children's names questions 26 October 2022 at 7:28AM in Savings & investments 21 replies 781 views

devends

Hi there, a recently deceased relative has left some money to my children aged 4-6.

The money is in the form of 2 cheques in their names so I can't pay then into my account.

I've found some saver accounts that I can open for them and be the trustee of until they're 18 that I'll be able to pay the money into.

The wording in the letter we received with the cheques says:
"Please note that they cannot access the funds until they attain the age of 18.

Please also note that, as the children cannot access the funds until they are 18, the accounts must be managed by yourselves as Trustees of the account."

If I decide to take out some of their money and put it into my ISA; with better interest for instance, with the intention to have it grow and give it back to them for a deposit on a house eventually, is this allowed?

In that when they reach 18 the full amount of the initial inheritance won't be in their matured account for them to instantly use?

Is this allowed? I find the guidelines quite vague.

Thanks in advance.

Flugelhorn

I think they can demand it from you on their 18th birthday

wmb194

devends said:

Hi there, a recently deceased relative has left some money to my children aged 4-6.

The money is in the form of 2 cheques in their names so I can't pay then into my account.

I've found some saver accounts that I can open for them and be the trustee of until they're 18 that I'll be able to pay the money into.

The wording in the letter we received with the cheques says:
"Please note that they cannot access the funds until they attain the age of 18.

Please also note that, as the children cannot access the funds until they are 18, the accounts must be managed by yourselves as Trustees of the account."

If I decide to take out some of their money and put it into my ISA; with better interest for instance, with the intention to have it grow and give it back to them for a deposit on a house eventually, is this allowed?

In that when they reach 18 the full amount of the initial inheritance won't be in their matured account for them to instantly use?

Is this allowed? I find the guidelines quite vague.

Thanks in advance.

Don't take the money and put it in your own account. Even with the best intentions that would be stealing.

Another route to comply with the no access until 18 stipulation would be to open child Isas with the cheques as these don't allow access until 18 and they can be invested in the stockmarket.

Do you know the actual wording of the will? They often state things like 'must be in trust with no access until 18/21' but unless they're worded correctly - and they often aren't - they are invalid.

Keep_pedalling

You can’t hold the money in your ISA. How much are we talking about? If it is £9000 or less you could simply open a JISA for each of them or put it into an existing JISAs if they have them. 

Holding their inheritance in cash is going to see the value substantially eroded by inflation over the next 12-14 years so investments may be a better option. If the inheritance is substantial it might be worth taking professional advice from an IFA.

400ixl

You wouldn't put it in your ISA, you would open Junior ISA's for them and put the money into those.

devends

Thanks for the comments. I definitely don't want to steal from my children, just want to make their money work for them the best it can.
Is a letter sent to them at 18 about the inheritance to let them know?

Keep_pedalling

wmb194 said:

devends said:

Hi there, a recently deceased relative has left some money to my children aged 4-6.

The money is in the form of 2 cheques in their names so I can't pay then into my account.

I've found some saver accounts that I can open for them and be the trustee of until they're 18 that I'll be able to pay the money into.

The wording in the letter we received with the cheques says:
"Please note that they cannot access the funds until they attain the age of 18.

Please also note that, as the children cannot access the funds until they are 18, the accounts must be managed by yourselves as Trustees of the account."

If I decide to take out some of their money and put it into my ISA; with better interest for instance, with the intention to have it grow and give it back to them for a deposit on a house eventually, is this allowed?

In that when they reach 18 the full amount of the initial inheritance won't be in their matured account for them to instantly use?

Is this allowed? I find the guidelines quite vague.

Thanks in advance.

Do you know the actual wording of the will? They often state things like 'must be in trust with no access until 18/21' but unless they're worded correctly - and they often aren't - they are invalid.

That is only relevant if the age stipulated is greater than 18 (16 in Scotland) Minors can’t inherit before then even if the will does not specify an age. 

km1500

If they are only 4-6 then putting it into a 'savings account' would pretty much guarantee inflation would reduce its value significantly by the time they are 18.

Better to put it into equities etc.

Keep_pedalling

8devends said:

Thanks for the comments. I definitely don't want to steal from my children, just want to make their money work for them the best it can.
Is a letter sent to them at 18 about the inheritance to let them know?

In the case of a JISA they will start to receive notifications about the account from the age of 16. Although they can’t touch the money until they are 18 they do get control over it at 16, so for instance they can make their own choices about which funds to hold in a S&Ss JISA. 

Really the best way to handle this is very much dependant on the sums involved, 

wmb194

Keep_pedalling said:

wmb194 said:

devends said:

Hi there, a recently deceased relative has left some money to my children aged 4-6.

The money is in the form of 2 cheques in their names so I can't pay then into my account.

I've found some saver accounts that I can open for them and be the trustee of until they're 18 that I'll be able to pay the money into.

The wording in the letter we received with the cheques says:
"Please note that they cannot access the funds until they attain the age of 18.

Please also note that, as the children cannot access the funds until they are 18, the accounts must be managed by yourselves as Trustees of the account."

If I decide to take out some of their money and put it into my ISA; with better interest for instance, with the intention to have it grow and give it back to them for a deposit on a house eventually, is this allowed?

In that when they reach 18 the full amount of the initial inheritance won't be in their matured account for them to instantly use?

Is this allowed? I find the guidelines quite vague.

Thanks in advance.

Do you know the actual wording of the will? They often state things like 'must be in trust with no access until 18/21' but unless they're worded correctly - and they often aren't - they are invalid.

That is only relevant if the age stipulated is greater than 18 (16 in Scotland) Minors can’t inherit before then even if the will does not specify an age. 

Sure, but I'm thinking of the 'no access' bit. Perhaps I'm over thinking it but does this mean that none of the money can be used for their benefit before they are 18?

Keep_pedalling

wmb194 said:

Keep_pedalling said:

wmb194 said:

devends said:

Hi there, a recently deceased relative has left some money to my children aged 4-6.

The money is in the form of 2 cheques in their names so I can't pay then into my account.

I've found some saver accounts that I can open for them and be the trustee of until they're 18 that I'll be able to pay the money into.

The wording in the letter we received with the cheques says:
"Please note that they cannot access the funds until they attain the age of 18.

Please also note that, as the children cannot access the funds until they are 18, the accounts must be managed by yourselves as Trustees of the account."

If I decide to take out some of their money and put it into my ISA; with better interest for instance, with the intention to have it grow and give it back to them for a deposit on a house eventually, is this allowed?

In that when they reach 18 the full amount of the initial inheritance won't be in their matured account for them to instantly use?

Is this allowed? I find the guidelines quite vague.

Thanks in advance.

Do you know the actual wording of the will? They often state things like 'must be in trust with no access until 18/21' but unless they're worded correctly - and they often aren't - they are invalid.

That is only relevant if the age stipulated is greater than 18 (16 in Scotland) Minors can’t inherit before then even if the will does not specify an age. 

Sure, but I'm thinking of the 'no access' bit. Does this mean that none of the money can be used for their benefit before they are 18?

Yes, it must be left until they are old enough to take full control, so as a trustee you can’t use it even if it for something for the child.