Bare trust for granddaughter for school fees

sarahmon

My mother (82) would like to put money in a bare trust savings account for my daughter's school fees for the next three years (from September - age 13-16) - about £45k (£15k pa) - I cannot be the sole trustee as I am on UC but another family member could be a trustee too - can anyone give any advice as to if this is possible and suitable products please?

Flugelhorn

I don't know about the bare trust but many schools allow you to pay in advance with a lump sum and get a discount 

Newbie_John

You can open Premium Bond for daughter (up to £50k) and use it to pay the fees.

Keep_pedalling

Putting money in a bare trust in the name of your daughter means the money is hers to do with as she pleases once she is 18 and you can’t spend it prior to that. The same applies to PBs.

As the fees are for the next 3 years why can’t she just pay them directly from her own savings? 

xylophone

Putting money in a bare trust in the name of your daughter means the money is hers to do with as she pleases once she is 18 and you can’t spend it prior to that

The Trustee may access the money provided that it is used solely for the benefit of the child beneficiary.

Example

https://www.skipton.co.uk/savings/childrens-savings-accounts/childrens-trust-saver#:~:text=Until the child turns 18,child will be the beneficiary.

poseidon1

xylophone said:

Putting money in a bare trust in the name of your daughter means the money is hers to do with as she pleases once she is 18 and you can’t spend it prior to that

The Trustee may access the money provided that it is used solely for the benefit of the child beneficiary.

Example

https://www.skipton.co.uk/savings/childrens-savings-accounts/childrens-trust-saver#:~:text=Until the child turns 18,child will be the beneficiary.

I would be wary of depositing funds with Skipton. Their Ts and Cs purport to give them quasi trustee discretionary powers ie ' any withdrawals not in child's name will be subject to our discretion'.

Seems to be of an overreach to me, and questionable on what legal authority they believe they have such discretion.

Cornish_mum

Hi Barclays Bank still operate trust accounts, but be warned they are a total pain to open and administer. Trustees will need to approve all expenditures (I have been a trustee for an adult (disabled) discretionary on a Barclays account). 

You or your mother will need to take advice from a STEP accredited solicitor to set it up properly, from what you have said you might need something other than a bare trust.

HRMC may also need an annual return for the trust. 

For the amount and timescale, your mother pre-paying the fees seems the most sensible option (assuming your daughter is well settled at the school and there is a refund clause in the fees contract regarding her not being able to talk up her place because of reasonable circumstances). 

roses

Following as my children are due to inherit some money in a few months which is to be put aside for their university fees in 10 years time. Is a bond in their name the best place to put the money?

Reaper

poseidon1 said:

xylophone said:

Putting money in a bare trust in the name of your daughter means the money is hers to do with as she pleases once she is 18 and you can’t spend it prior to that

The Trustee may access the money provided that it is used solely for the benefit of the child beneficiary.

Example

https://www.skipton.co.uk/savings/childrens-savings-accounts/childrens-trust-saver#:~:text=Until the child turns 18,child will be the beneficiary.

I would be wary of depositing funds with Skipton. Their Ts and Cs purport to give them quasi trustee discretionary powers ie ' any withdrawals not in child's name will be subject to our discretion'.

Seems to be of an overreach to me, and questionable on what legal authority they believe they have such discretion.

I am pleased to hear they are checking. There are cases of parents illegally using their children's allowances to evade the taxman, and I have also seen cases on here where after a divorce one parent has stolen the child's savings.

Making sure the child's money is protected is a good thing.

Reaper

sarahmon said:

My mother (82) would like to put money in a bare trust savings account for my daughter's school fees for the next three years (from September - age 13-16) - about £45k (£15k pa) - I cannot be the sole trustee as I am on UC but another family member could be a trustee too - can anyone give any advice as to if this is possible and suitable products please?

Despite the warnings above a investment Bare Trust is fairly easy to set up because the investment company will do it for you. No need to pay a solicitor. For example:
https://www.hl.co.uk/investment-services/investing-for-children/bare-trust-account

I can confirm you can take money out to pay for school fees and I have done exactly that.

However you may find it harder to find somebody willing to set up a Bare Trust on a savings account.

artyboy

Reaper said:

sarahmon said:

My mother (82) would like to put money in a bare trust savings account for my daughter's school fees for the next three years (from September - age 13-16) - about £45k (£15k pa) - I cannot be the sole trustee as I am on UC but another family member could be a trustee too - can anyone give any advice as to if this is possible and suitable products please?

Despite the warnings above a investment Bare Trust is fairly easy to set up because the investment company will do it for you. No need to pay a solicitor. For example:
https://www.hl.co.uk/investment-services/investing-for-children/bare-trust-account

I can confirm you can take money out to pay for school fees and I have done exactly that.

However you may find it harder to find somebody willing to set up a Bare Trust on a savings account.

Maybe one of these invested into ROSTA or CSH2 might be a reasonable compromise in terms of something that is quite "like" a savings account?