Get money out of child ISA due to lifelong disability

housebuyer143

I am not sure if this is the right place to post but asking on behalf of a friend. 
They have put tens of thousands into a child ISA which cannot be accessed until 18, however it has since come to light that her child has a lifelong learning difficulty and so will never be able to manage their own funds or have use of the money. They have tried to get the money out on this ground, but have been refused.

Is there anyway to access it before the child is 18? As far as they understand they will then have to go through the courts to get power of attorney to even be able to access it when the child turns 18.

GDB2222

"will never ... have use of the money"  - umm, why not? 

housebuyer143

GDB2222 said:

"will never ... have use of the money"  - umm, why not? 

Well the money would be useful now to provide for the child, just as much as it would be useful in the future. Leaving it there for over a decade just so the parents can fight to access it then seems a little silly?

The child will never have use of the money because they lack the mental capacity to manage money so it will always be the parents who are responsible for this. 

Aretnap

https://www.gov.uk/guidance/close-void-or-withdraw-investments-from-a-junior-isa-as-an-isa-manager#death-of-the-child

Money in a junior ISA is pretty much irrecoverably locked away until the child's 18th birthday. The only grounds for early withdrawal are if the child dies or is terminally ill. (Or to rectify obvious mistakes like sending the money to the wrong account number). So I'm afraid it doesn't look like there's any way of accessing it for now.

They're right that they'll have to go through a legal process to manage the money on the child's behalf when they turn 18 - as you would expect of you wanted to access someone else's bank account to be honest.

GDB2222

housebuyer143 said:

GDB2222 said:

"will never ... have use of the money"  - umm, why not? 

Well the money would be useful now to provide for the child, just as much as it would be useful in the future. Leaving it there for over a decade just so the parents can fight to access it then seems a little silly?

The child will never have use of the money because they lack the mental capacity to manage money so it will always be the parents who are responsible for this. 

Thanks for explaining. 

The money was always intended to be for the child's benefit, and it's quite likely the needs will be greater at age 18 than now. 

housebuyer143

Aretnap said:

https://www.gov.uk/guidance/close-void-or-withdraw-investments-from-a-junior-isa-as-an-isa-manager#death-of-the-child

Money in a junior ISA is pretty much irrecoverably locked away until the child's 18th birthday. The only grounds for early withdrawal are if the child dies or is terminally ill. (Or to rectify obvious mistakes like sending the money to the wrong account number). So I'm afraid it doesn't look like there's any way of accessing it for now.

They're right that they'll have to go through a legal process to manage the money on the child's behalf when they turn 18 - as you would expect of you wanted to access someone else's bank account to be honest.

Thanks - Seems a little harsh that parents are going to be forced to spend money to become to 18 years olds power of attorney and all the stuff that comes with that, while those that don't can carry on as their appointee as they have always been.
I supposed for them its worth doing, but if you only had a few hundred in there you would probably think twice about spending the time and money to get it out. 

theoretica

How long until the child turns 18?  There is a chance the system will have changed by then.

masonic

housebuyer143 said:

Well the money would be useful now to provide for the child, just as much as it would be useful in the future. Leaving it there for over a decade just so the parents can fight to access it then seems a little silly?

The child will never have use of the money because they lack the mental capacity to manage money so it will always be the parents who are responsible for this. 

She can take some solace that the money would be useful in the future, as it is not always the case. The only thing that has changed through learning of this situation is who will be responsible for ensuring the money is used in the best interests of the child. Irrespective of the JISA, someone will need to take responsibility for the finances of the child post-18, and that will likely require the same legal process to be followed as the JISA. It's hard to envisage any circumstance, as presented, in which the child would be left to their own devices at 18 with nobody having the legal power to intervene in their affairs.

The money might never be controlled by the child, but the child legally owns the money and will benefit from the use of the money, assuming the parents (or whomever takes that responsibility in the future) act appropriately. I don't think you were implying any such concern existed about the parents. Having this money put away for the future can be viewed as a positive. It is protected from any financial difficulties the parents might face in the intervening years.

elsien

If the child lacks capacity to manage their own money when they turn 18, it is possible that they would also lack the capacity to appoint a power-of-attorney. In that situation, the parents would need to apply to the court of protection for a deputyship. This is not a quick process due to backlogs in the court of protection, although depending on how young the child is, things may have changed by then. 
it’s not a fight, it’s a legal process and a safeguard for the adult in question to make sure the money is accountable and being used in their best interests. 

https://www.gov.uk/become-deputy Otherwise anyone could be trying to access other people’s accounts by saying they lack capacity, with no real proof and banks scratching their heads over who to believe. 

Most families are responsible. A minority aren’t. 

jimjames

housebuyer143 said:

Aretnap said:

https://www.gov.uk/guidance/close-void-or-withdraw-investments-from-a-junior-isa-as-an-isa-manager#death-of-the-child

Money in a junior ISA is pretty much irrecoverably locked away until the child's 18th birthday. The only grounds for early withdrawal are if the child dies or is terminally ill. (Or to rectify obvious mistakes like sending the money to the wrong account number). So I'm afraid it doesn't look like there's any way of accessing it for now.

They're right that they'll have to go through a legal process to manage the money on the child's behalf when they turn 18 - as you would expect of you wanted to access someone else's bank account to be honest.

Thanks - Seems a little harsh that parents are going to be forced to spend money to become to 18 years olds power of attorney and all the stuff that comes with that, while those that don't can carry on as their appointee as they have always been.

Presumably the situation as you've described it means they would have to get power of attorney anyway when the child reaches 18 so although a laborious process it's not really something they'd be able to avoid if the ISA didn't exist.

elsien

housebuyer143 said:

Aretnap said:

https://www.gov.uk/guidance/close-void-or-withdraw-investments-from-a-junior-isa-as-an-isa-manager#death-of-the-child

Money in a junior ISA is pretty much irrecoverably locked away until the child's 18th birthday. The only grounds for early withdrawal are if the child dies or is terminally ill. (Or to rectify obvious mistakes like sending the money to the wrong account number). So I'm afraid it doesn't look like there's any way of accessing it for now.

They're right that they'll have to go through a legal process to manage the money on the child's behalf when they turn 18 - as you would expect of you wanted to access someone else's bank account to be honest.

Thanks - Seems a little harsh that parents are going to be forced to spend money to become to 18 years olds power of attorney and all the stuff that comes with that, while those that don't can carry on as their appointee as they have always been.
I supposed for them its worth doing, but if you only had a few hundred in there you would probably think twice about spending the time and money to get it out. 

It’s because of the amount of money in involved and because it’s a separate account. 

An appointee just manages benefits and pays bills out for people. An appointee cannot legally access someone else’s bank account whatever their relationship. 

The LPA/deputyship will allow a lot more flexibility in the long run with what accounts/investments can be set up to maximise income.
if you lost capacity and didn’t have a power-of-attorney, then someone would need to apply for a deputyship for you to access your pensions and your savings, sell your house if you needed to, all the things you take for granted. Even if you already had an appointee for benefits.