Inheritance and Financial Acc. Query...

cloud_dog

Wasn't sure where this fitted best so, have also posted this on the SAvings & Investing board…….

My mother wants to gift each of her grandchildren some money in to her will. The amount is unlikely to be huge but likely to be significant (certainly for the grandchildren).

Some background………….

We have discussed her wishes and, as she has already provided monies in to the GC CTF (funds) it was felt that it would probably be better for the terms of her will to identify the 21st b/day as a suitable transfer point.

Another consideration is to write in the will that each GC monies will be divided in to two, with the first 50% being placed in to a ‘safe’ account (BS account) which the GC will receive the value of these monies on their 21st b/day. The second portion (up to a max of 50% of the original sum) would be entrusted in to the responsibility of the GC guardians (me and my brother) for managing, i.e. investing if chosen, and used for the GC benefit, i.e. university, house, car, etc, etc. but, that any monies left in the second 50% would become the GC on their 25th b/day.

This raises a couple of points:

1) Is this just way too complicated, and is it achievable with little (no) costs?
2) How can you open a BS account in order to gain gross interest and for the account to remain out of reach of the GC until aged 21?
3) Similarly, how can you make an investment, utilising the GC CGT allowance (later in life) and gross interest etc and for the account to remain out of reach of the GC until 25?

Is it possible to achieve the above without involving legal people and what needs to be put in place to achieve this?

Any comments gratefully appreciated.

Thanks cloud_dog

Murdina

Can I just add that I cannot see any way you can avoid "the legal people" as you put it. The arrangements you are proposing amount to putting money into trust and there are complex issues of trust law as well as tax law . A trust does not necessarily require a written legal document to come into existence but there are legal provisions which come into play in the absence of a deed providing otherwise. Revisions to the taxation of trusts in 2006 may well also land you with some tax liabilities, though without knowing what the amounts involved are cannot comment further. I would strongly recommend that if the family really want to do this they take legal advice, otherwise just leave the children the money directly and hope they do not fritter it all away.