How do I set up a trust for a child ?

Kathleen_333

Could anyone advise the best way to set up a trust for a child who has inherited some money from a relative who sadly recently passed away.?

Albermarle

Are you a parent of the child?
What did the will say? Did it mention a trust ?
Can you give some idea of the sums involved?

wmb194

What kind of trust?

Keep_pedalling

How old is the child and how much money? If it’s a relatively small sum you could put it in JISA.

Kathleen_333

I'm not what type of trust would be best. I'd like it to go to her when she's 21. It's about £45000 and he is 13 years old.

eskbanker

Kathleen_333 said:

I'm not what type of trust would be best. I'd like it to go to her when she's 21. It's about £45000 and he is 13 years old.

As above, it's important to establish the exact wording of the will, in order to ascertain whether the child automatically has the legal right to access the money at 18 or whether you have the discretion to decide.

xylophone

 I'd like it to go to her when she's 21. It's about £45000 and he is 13 years old.

What exactly does the will say in respect of this bequest? Does it  give you any discretion on when the child may access the funds?

 Or is this an absolute and unconditional gift  which indefeasibly vests in the child and the only reason that  she may not be given the money immediately is that being a minor, she cannot legally give good receipt for the funds?

If this is the case, then  the bequest will need to be held in bare trust for her until she reaches the age of 18 (16 in Scotland).

If held in a child savings account, there would be no need for the Trust to be registered with HMRC.

See

https://www.litrg.org.uk/tax-guides/savers-property-owners-and-other-tax-issues/introduction-trusts/do-i-need-register-my

Bank accounts held for children. Bank accounts holding cash on behalf of a minor child or a person lacking mental capacity are not registerable. You can read more about this exemption on GOV.UK.

Does the child have a CTF/Junior ISA?

Junior ISAs. HMRC have specifically agreed that cash Junior ISAs and stocks and shares Junior ISAs are not registerable.

The best rate generally available on a Junior cash ISA is 4.95% from Coventry BS.

With regard to other child accounts - example

https://www.skipton.co.uk/savings/childrens/childrens-trust-saver#:~:text=3.80% gross pa/AER variable&text=This account might be right,can go up or down

Otherwise, does the will specifically mention a Trust, in particular a Discretionary Trust?

Is there any clause stating that the child only inherits if (rather than when) she turns a certain age?