Bare trust? Need advice on how to invest funds for bereaved children

MissBojangles

Quick overview:
3 minors - all under the age of 12
One parent deceased (intestate) - surviving parent will not cooperate
Grandparent has letters of administration for estate of deceased parent (value £25k)
Need to invest the money equally in three accounts for the children to have at age 18

Would welcome any advice on the best type of account to open.  Grandparent does not have birth certificates or passports of children as surviving parent is uncooperative.
Is there any way to invest this for the benefit of the children without the surviving parent being involved?

TIA

LHW99

AFAIK all financial institutions will need sight of a birth certificate (or similar) to open a child's account.

As administrator of the estate, would you be able to order copies of the childen's certificates?

You could enquire at the GRO - see "Get help ordering a certificate" about 1/3 way down this page

https://www.gov.uk/order-copy-birth-death-marriage-certificate

Otherwise, maybe a solicitor's letter to the surviving parent would trigger action, as you do have some legal responsibilities as administrator.

You could try posting on this MSE forum:

https://forums.moneysavingexpert.com/categories/deaths-funerals-probate

People there may have more knowledge of this type of situation.

xylophone

Need to invest the money equally in three accounts for the children to have at age 18

Perhaps the Leeds Ronnie the Rhino account might suit with the grandparent(s) as authorised signatories?

https://www.leedsbuildingsociety.co.uk/savings/childrens-savings-accounts/ronnie-the-rhino-youngsaver/

https://www.gov.uk/order-copy-birth-death-marriage-certificate

olbas_oil

I thought you would be stuck without birth certificates. But if you can get them without the parent's co-operation, and it looks as though that is possible? 3 Simple Ways to Get a Copy of a Birth Certificate in the UK (wikihow.com)) then it's worth looking at the A J Bell dealing account for children. 
That contains a trust declaration. It requires that you register the trusts on the government trust registration service (but AJ Bell can talk you through that) There is an annual custody charge.

Albermarle

olbas_oil said:

I thought you would be stuck without birth certificates. But if you can get them without the parent's co-operation, and it looks as though that is possible? 3 Simple Ways to Get a Copy of a Birth Certificate in the UK (wikihow.com)) then it's worth looking at the A J Bell dealing account for children. 
That contains a trust declaration. It requires that you register the trusts on the government trust registration service (but AJ Bell can talk you through that) There is an annual custody charge.

I am not sure about this but would it not be just easier to put the money in three separate JISA's, where access is not allowed until 18 anyway ? Two providers of JISA's ( HL and Fidelity) waive their platform fees for JISA's.
Although like the AJ Bell account these are investment accounts rather than cash savings accounts, although with the time frame involved , investing will probably be better than savings anyway.

Malthusian

Albermarle said:

I am not sure about this but would it not be just easier to put the money in three separate JISA's, where access is not allowed until 18 anyway ? 

Not an option if the "surviving parent will not co-operate" (assuming the surviving parent is their guardian). Junior ISAs have to be run by a parent if there is one.
In any case, Junior ISAs should not be used for funds which are already in bare trust (e.g. inherited from a Will), as the legal age limits of JISAs are incompatible with the legal age limits of monies held in bare trust. (Outside Scotland the trustees lose control over the investments at 16 when the child is still a minor, and inside Scotland they prevent the beneficiary accessing the money at 16 as they are absolutely entitled to.)
As per the above, investment accounts held by the trustees would be the way to go. ID for the children would not necessarily be required to open them as the accounts could be in the name of the trustees with an irrevocable designation (e.g. the children's initials).
The trusts will all need to be registered with HMRC's trust registration service. Wrong as per Xylophone.
The choice of trustees should be considered - it doesn't have to be the same as the executors. If the grandparent wants the job, it may still be prudent to appoint a trustworthy younger person alongside them, in case the grandparent dies or loses capacity before the children all reach 18.

xylophone

In any case, Junior ISAs should not be used for funds which are already in bare trust 

But the Trustee of a bare Trust has the right to apply funds within the Trust for the benefit of the  beneficiaries of the Trust.

I would argue therefore that the Trustee of a Bare Trust could choose to transfer funds out of trust to the JISA of the beneficiary.

Indeed, in this particular case where the beneficiaries are each to receive 1/3 of £25,000 it would seem to me the simplest solution.

However, it is a moot point here as the parent of the children will not co-operate with opening the JISAs.

Re registration, I  wonder is the below still current law and applicable to this case?

https://www.gov.uk/trusts-taxes/registering-a-trust

You must register your trust even if it’s not liable for UK taxes - unless any of the following apply.

• is for bereaved children under 18, or adults aged 18 to 25, set up under the will (or intestacy) of a deceased parent or the Criminal Injuries Compensation Scheme

The OP would need to check.

A savings account is not ideal in terms of inflation risk but in this particular case and particularly if the children are only around six years from age eighteen, might be the best of a bad job.

https://www.skipton.co.uk/savings/childrens/childrens-saver would be another possibility in these circumstances.



Otherwise, an investment account in bare trust for each child (with the associated administration) is the alternative.

theoretica

The question does seem to come in whether the current trustees believe the uncooperative parent has the resources and will care adequately for the children until they reach 18.  Putting the money into an account where the grandparents cannot access it in case of need can be a good thing, and prevent pressure for access from the other parent - but it can also be a problem if the children need it when they are younger.

Malthusian

Apologies, I forgot about the exemption from HMRC registration for Will / bereaved minor trusts.

theoretica said:

The question does seem to come in whether the current trustees believe the uncooperative parent has the resources and will care adequately for the children until they reach 18.  Putting the money into an account where the grandparents cannot access it in case of need can be a good thing, and prevent pressure for access from the other parent - but it can also be a problem if the children need it when they are younger.

A very valid concern, but it is probably spilt milk. The money belongs to the children and neither the executors nor the trustees can give it to the parent or A. N. Other just to make life easier for the family. The executors must follow the law of intestacy (I'm assuming it applies as "letters of administration" were mentioned) and the trustees can only allow withdrawals before 18 if it is for the child's sole benefit. (School fees are the classic example - although not very relevant for £25k split three ways.)
The money is not going to be "put into an account where the grandparents cannot access it", it already belongs to the children and cannot be accessed by anyone until the child is 18, except in the very limited circumstances mentioned above.
Anyway, we haven't been told that the other parent is inadequate, only that they aren't co-operating with the grandparent. Two people can be capable and still fall out with each other.

theoretica

Malthusian said:

Apologies, I forgot about the exemption from HMRC registration for Will / bereaved minor trusts.

theoretica said:

The question does seem to come in whether the current trustees believe the uncooperative parent has the resources and will care adequately for the children until they reach 18.  Putting the money into an account where the grandparents cannot access it in case of need can be a good thing, and prevent pressure for access from the other parent - but it can also be a problem if the children need it when they are younger.

A very valid concern, but it is probably spilt milk. The money belongs to the children and neither the executors nor the trustees can give it to the parent or A. N. Other just to make life easier for the family. The executors must follow the law of intestacy (I'm assuming it applies as "letters of administration" were mentioned) and the trustees can only allow withdrawals before 18 if it is for the child's sole benefit. (School fees are the classic example - although not very relevant for £25k split three ways.)
The money is not going to be "put into an account where the grandparents cannot access it", it already belongs to the children and cannot be accessed by anyone until the child is 18, except in the very limited circumstances mentioned above.
Anyway, we haven't been told that the other parent is inadequate, only that they aren't co-operating with the grandparent. Two people can be capable and still fall out with each other.

'For the child's sole benefit' is exactly my point - and I can think of many ways where 8k could be better spent in childhood than saved, depending on the financial resources of the remaining parent and the childhood the children will have without this money.  Swimming lessons, driving lessons, school trips, better clothing, hobbies... 

xylophone

'For the child's sole benefit' is exactly my point - and I can think of many ways where 8k could be better spent in childhood than saved, depending on the financial resources of the remaining parent and the childhood the children will have without this money.  Swimming lessons, driving lessons, school trips, better clothing, hobbies... 

In which case the Trustee (s) hold the money in a child savings account for each child as above and release monies at his/ their discretion for the specific benefit of each child.