What to do with a childs inheritance that needs to be held in trust until 18?

daviesalie_2

My son has inherited £60k. There was no will so it's gone through probate. Myself and my sister are Trustees and I know he must have access to the money from the age of 18 (which will be in 5 years) arnd until that time the money should be held in trust. So my questions are...

Where should we put the money?

I've looked at child Isa's but they're limited to 9k a year.  Childrens savings accounts seem to be designed for regular savers. I've only found one fixed term account for children but it has a rubbish interest rate.  All the fixed term savings accounts with decent rates are for 18 or over.

if the account is in my name I'm guessing I'll need to pay tax on the interest,  which I think will work out about £250 a year. Can this be taken out of the interest at maturity?

 Also do I need to put my sister, the other trustee, on the account as a joint holder or does she just need a say on how it's invested?

Any advice would be hugely appreciated. I feel like I'm locked in a bit of a viscous circle at the moment and not sure where to go for advice. 

Keep_pedalling

5 years is a bit of a tricky timescale 5 years is a bit short for investments and is subject to inflationary pressures when held in cash. I would look to do a split, put 9k in a S&Ss JISA now and top it up with another 9k on April 6th.

Put the rest in a cash account. I think some of the building societies will do trust accounts for minors, try Skipton as a starting point. 

Marcon

daviesalie_2 said:

My son has inherited £60k. There was no will so it's gone through probate. Myself and my sister are Trustees and I know he must have access to the money from the age of 18 (which will be in 5 years) arnd until that time the money should be held in trust. So my questions are...

Where should we put the money?

I've looked at child Isa's but they're limited to 9k a year.  Childrens savings accounts seem to be designed for regular savers. I've only found one fixed term account for children but it has a rubbish interest rate.  All the fixed term savings accounts with decent rates are for 18 or over.

if the account is in my name I'm guessing I'll need to pay tax on the interest,  which I think will work out about £250 a year. Can this be taken out of the interest at maturity?

 Also do I need to put my sister, the other trustee, on the account as a joint holder or does she just need a say on how it's invested?

Any advice would be hugely appreciated. I feel like I'm locked in a bit of a viscous circle at the moment and not sure where to go for advice. 

No harm in starting with a conversation with your local bank and/or building society to see what they suggest/can offer.  Sure, they are 'tied' (i.e. not independent, so won't be recommending whole of market products), but it's still worth seeing what sort of products they can suggest/try to sell you.

The alternative is to pay for some advice from an independent financial adviser. Given this is a tidy sum of money, and you and your sister have responsibilities both legal and moral, that might be no bad 'investment'.

Free 'advice' on a forum like this, where any old person could respond regardless of their level of knowledge, and where there is next to no information about the overall family background/ aspirations, is sometimes worth noting (certainly the previous answer is well worth pondering), but often responses reflect nothing more than a personal hobby horse/opinion.