Open an account for my grandchild with myself as Trustee

Mum23boys

Without going into too much detail, my 1 year old grandson has recently lost his daddy (my son) and his mummy unfortunately has a life shortening condition (she has 10 years left at the most but it could be anytime).
I would like to open an account for my grandson, with myself and my husband as Trustees. I don't really want his mum (or her parents) to be able to access the money plus it would all be to change around anyway after she passes away.
Can anyone advise me on a suitable account that would also gain interest? It seems all Children's ISAs have to be opened by a parent or guardian.

Keep_pedalling

Sorry you find yourself in such a horrible situation. The first thing to think about is what sort of trust. A bear trust is the simplest but they would be able to have full control once they are 18. A discretionary trust would leave you in full control but they are mote complex and are subject to some significationly high taxation and not really practical unless we are talking about a large amount.

The other option is to save for them in your name and make sure you have suitable wills in place.

xylophone

A bear trust is the simplest

If you go down to the woods today? 

https://www.ybs.co.uk/savings/childrens-savings

https://www.skipton.co.uk/savings/childrens/childrens-trust-saver might suit.

This is a very sad situation - has your daughter in law written a will and named guardians for your grandson?

Albermarle

It could be easier in this difficult situation just to save/invest the money yourselves, and then give money as gifts to them as and when. Plus have them as a beneficiary in your will(s) .

olbas_oil

Take a look at AJ Bell's bare trust dealing account. The application form contains the 'declaration of trust', so there's no need for anyone to draw that up for you. You have to register with the government's trust registration service (but you have to do that anyway with a bare trust).
It is a 'dealing account' but you can make it behave like a savings account by buying near-cash ETFs, or if you want equity exposure you can buy  funds that track all world indexes.

The disadvantage of a bare trust is that  income and capital gains are taxable (as opposed to a child ISA) as your grandson's- However he is entitled to the  personal & dividend allowances, so there won't be any tax owed, unless you are investing a considerable amount.
Do watch out for CGT though. If the annual exemption stays so low, and the shares simply rise with inflation, there could be a large bill after 18 years. But the same is true if you simply hold the assets as your own. At least in a bare trust he has his own annual exemption and you could do some 'bed & breakfasting' on his behalf.

The advantage is that you do not need to wait until he is 18 to access the funds. Providing it is a genuine withdrawal for his benefit, you can withdraw income and capital as the needs arise.

There is a monthly fee for this account.

xylophone

(but you have to do that anyway with a bare trust).

Not if just a child savings account.

https://www.gov.uk/hmrc-internal-manuals/trust-registration-service-manual/trsm23160

Example

Dominic opens a child savings account with the Anytown Building Society in the name of his infant daughter Mia. Dominic intends to pay funds into the account by regular standing order for Mia’s benefit as she grows older.

Though Dominic is technically holding the bank account on bare trust for Mia’s benefit until Mia is old enough to take full 

ownership of the account, this trust does not need to be registered on TRS.

https://www.goodmanjones.com/blog/do-i-need-to-register-my-childs-trust-now/#:~:text=Do bare trusts need to,now required to be registered.

Do bare trusts need to register?

This seems to be an area of confusion as children’s bank accounts held under a bare trust arrangement are excluded.  However, any bare trusts that hold stocks and shares are now required to be registered.

Personal Injury Bare Trust is also excluded from requirement to register.

https://www.gov.uk/hmrc-internal-manuals/trust-registration-service-manual/trsm23030

Mum23boys

xylophone - It is a very sad situation! I don't think she has a will. I think when she dies, her parents will then be guardians. Obviously we will help out as much as we can. Everyone thought it was going to be the other way around and my son would still be alive but it hasn't happened that way.