Children’s inheritance

SevenOfNine

We have 3 accounts for each of our 2 granddons. 2 are inheritance & the 3rd is money we gift them.

ALL are in THEIR names with one or the other of us as trustee. Only one organisation allowed both of us to be joint trustees. It's not our money, it's theirs & the way it's all arranged was our decision, not tied by instructions in a will.

We didn't want any of it to look remotely like 'ours', but wanted to be in control of it on their behalf, (7 years now), the parents weren't/aren't bothered. They can look at 1 or 2 of the a/c's via apps, but according to parents they haven't, & the boys haven't asked for any of it either, so far!

Richard1212

Posters are starting to move away from this particular case and talk of their own arrangement for grandchildren etc. The original position in this thread is that the parent is not the executor and, unless the Will expressly gives instructions about how the money should be kept for the child     ( such as details of a Trust or who should look after the money), then the executor has full power to determine how to act and where to hold the child's inheritance. I assume no mention was made in the Will as to how or where the child's inheritance should be kept.

As I mentioned earlier in this thread, the parent has NOT been made executor of Will, has NOT been given the role of Trustee and has NOT been named as the person who should look after the money until child becomes of legal age. We have to assume the writer of the Will knew what he/she was doing, especially if the Will was drawn up by a solicitor---but even if it was not. The parent has no right to interfere with the legal position, no matter how much he/she wants it under his/her control.

Spendless

Can the child/ren who are 12 & 14 request that the money is either paid into a JISA so they can access it at 18 or request annual statements that shows the money in the executor accounts?  I don't know if that is allowed? 

Keep_pedalling

Richard1212 said:

Posters are starting to move away from this particular case and talk of their own arrangement for grandchildren etc. The original position in this thread is that the parent is not the executor and, unless the Will expressly gives instructions about how the money should be kept for the child     ( such as details of a Trust or who should look after the money), then the executor has full power to determine how to act and where to hold the child's inheritance. I assume no mention was made in the Will as to how or where the child's inheritance should be kept.

As I mentioned earlier in this thread, the parent has NOT been made executor of Will, has NOT been given the role of Trustee and has NOT been named as the person who should look after the money until child becomes of legal age. We have to assume the writer of the Will knew what he/she was doing, especially if the Will was drawn up by a solicitor---but even if it was not. The parent has no right to interfere with the legal position, no matter how much he/she wants it under his/her control.

The executors do indeed have the responsibility for distributing the estate but that does not give then the right to place the children’s money where they like. The will may not mention trusts, but where minors are concerned their inheritance has to be held in trust, so the executors can’t just stick it in a personal account in their name it has to be held in a trustee account. 

The executors could chose to act as trustees for the children’s trust or they could hand that role over to the parents. Even where they chose to take the role on any parent would be within their right to challenge what was done with the money if they believe it is being invested with a high risk or saved at well below available interest rates and the parents could apply to the courts to have the trustees removed. 

The way the opening post was worded it seemed that the executors were just going to stick it in a personal account which is wrong, but unfortunately many lay executors make mistakes because they don’t really know what their responsibilities are. The testator may have chosen the executors for a good reason, but we see many examples on this board of where terrible choices have been made.

SevenOfNine

The point of my post Richard1212 is that examples of other options the OP might want the executors to consider 'might' be helpful.

If the executor/s insist on keeping control they can still do that with the children's money in the name of each child & one of them as trustee, but  the parent can also keep an eye on it through the child (over 7yrs old) having 'viewing' access. Others here have touched on what happened to the offspring of someone else when the time came to receive their inheritance!

The possibility of tax implications with money looking like it belongs to the executor, not the child. Then there's the issue of mortality, & the complication of money solely in their name, forming part of THEIR estate should they not survive until maturity of the child/ren.

Contrary to thinking the parent just has to suck up what the executor/s are deciding to do, OP may be able to negotiate/persuade an alternative everyone will be happy with.

Richard1212

Yes, but the bottom line is that the executor has sole responsibility and MUST take control of child's inheritance if no provision for Trust/Trustees has been included in the Will ( unless the executor wishes to come to some agreement about a Trust being set up etc-----and executor has final say on that). 

Sea_Shell

Richard1212 said:

Yes, but the bottom line is that the executor has sole responsibility and MUST take control of child's inheritance if no provision for Trust/Trustees has been included in the Will ( unless the executor wishes to come to some agreement about a Trust being set up etc-----and executor has final say on that). 

That may well be the STRICT LEGAL position, but most of us live in the real world, where wider issues like relationships, trust and honesty come into play, and should be considered by all parties.   

Whilst there may not be a LEGAL requirement for open and transparent dealing of the child's inheritance, it would probably be best all round if there was.   

To not do so carries greater risks IMO, than those that may arise from simply working with the parents to agree a SUITABLE solution.

Malthusian

Richard1212 said:

Putting it in an account under his name is not unusual----after all, he is the executor, the person entrusted to do all post mortem work-----and, let's face it, he can't very well run off and spend the money himself as everyone will stand up and point his way to prison.

If someone came here and said "My children were left some money in a Will, no trustees were specified, the executor has refused to communicate with us, and we know he hasn't set up any accounts in their name, he claims it's 'resting in his account' because he can get higher interest" they'd be told in no uncertain terms to speak to a solicitor about getting the executor to hand over the money to the children, or at least invest it as a prudent person of business would, i.e. in the children's own names.
Talking about prison is silly, this is a civil matter.
In fairness to the OP's executors, they may only be trying to keep the money in their account because they are financially inexperienced. (We have seen plenty of other threads along those lines.) If they continue to insist on holding on to it, alarm bells should be ringing.
There might be good reasons not to appoint the OP as Trustee. With apologies to the OP, there might even be good reasons not to disclose information about a child's assets to their parent. There are no good reasons for a Trustee to have the beneficiary's money resting in the Trustee's account (other than temporarily).

Richard1212 said:

Yes, but the bottom line is that the executor has sole responsibility and MUST take control of child's inheritance if no provision for Trust/Trustees has been included in the Will ( unless the executor wishes to come to some agreement about a Trust being set up etc-----and executor has final say on that). 

A Trust has already been set up by the Will.
There is nothing stopping the executor from appointing one or both parents as Trustees if they are suitable, or even handing it over to a firm of solicitors if there is no other practical option and the executor doesn't want to do the job themselves.
Being appointed executor of a Will and not having Trustees to hand over the money to is not justification for leaving beneficiaries' money resting in your own account. 

doodling

Hi,

There seem to be some views here which are towards the edges of a reasonable middle ground.

Firstly, for the avoidance of doubt, legally it is the executors money (that is the essence of a trust, someone owning something on behalf of someone else).

Secondly the executors duty is to ensure that the money is distributed according to the will.

Those two things combined mean that whilst it is legally viable for the executor to keep the money in one of their own accounts (indeed, any trustee account is in the executors name anyway as they are the trustee!), it is good practise for the executor to keep the money separate from their own and ideally somehow separately identified as being the assets of a trust.  This helps both the beneficiary and the trustee in a variety of ways.

If no separate trustee is identified by the will then it is the executors duty to ensure that the money reaches the beneficiary in due course.  They may feel uncomfortable placing the money under someone else's control whilst still being responsible if it goes missing.  It is therefore not irrational for them to be reluctant to give control to a parent, either because the executor is just not a trusting person generally or they do not trust the parent specifically.

There is no reason for the executor to be anything other than open and honest with the beneficiaries and their parents.

How to handle any situation depends on the details which we never really know on this forum.  If the executor isn't being clear about their plans, doesnt understand their responsibilities and isn't willing to discuss things then it might be worth digging deeper and potentially obtaining legal advice.  Alternatively, the executor might have a very good idea of their responsibilities and is fed up to the back teeth of being asked questions by parents who seem intent on gaining control of their child's money, potentially for their own benefit (as the executor sees it).