Updating Will for money for Grandchildren query

ih8stress

Hi,

My current Will is set up to leave all my money to my grandchildren when they reach 21 but reading numerous threads on here it seems that this will incur hefty taxation and need to be set up in a Trust, difficult to manage etc.

As the sum involved (currently unless I win the lottery) is around £40,000 a STEP qualified solicitor would also be costly to set up.

It seems that opening a JISA is the most popular suggestion - although this of course means that the money goes to them at 18, which is not ideal.

So, in conclusion either a Trust will be needed until they reach 21

OR putting the money into a JISA (or other savings accounts) which they will be able to take control of when they reach 18.

If I go down the JISA/Savings route (obviously a parent would need to open the account, which is not an issue) - what changes do I need to make with my current Will, as I obviously want to remove the 'Trust' element?

Thanks :)

Keep_pedalling

Your choices in your will are to leave it to them absolutely or in trust until they are 21 but the latter is not really an option for such a small amount of money. If you die and any of them are still minors then their share will need to be held in trust until they reach 18. Where this money is is held is really down to your executors / children, you can’t specify it has to be put in a JISA.

How old are your GC now?

Emmia

How many grandchildren do you have? £40k divided by a few doesn't end up being much money each. I'd probably just let them inherit at 18 - if they spaff it that's on them…. They could just as easily spaff it at 21, 25, 30.

I think there is generally very little point trying to control your money after you're gone. Give your gift with no strings and hope that they use it wisely.

Albermarle

Plus of course you may well still be alive when they get to 18 , or 21, or older. Then you can choose when to give it to them, and see the gratitude as you will still be alive !

ih8stress

@Keep_pedalling - They are 12 and 14 now . I thought that I might be able to set up a JISA or Savings Account for them whilst I am still alive - not telling the Trustees/Executors to do that later.
It looks like a JISA isn't ideal anyway as if they died before reaching 18, the money would go to THEIR side of the family (their Mum and Dad are not married/together).

@Emmia - thank you , had to laugh at 'spaff' - not heard that phrase before, ha ha.

@Albermarle - I hope I am but health isn't good these days , and in this life there are no guarantees as I am more than aware of.
Trouble is that I think I can only 'gift' £3,000 a year - unless I live more than 7 years afterwards.
(need to look into this properly as I definitely don't have enough for IHT issues, so may be able to leave any amount, even if I died within the 7 years).

mta999

If you really want them to not inherit until they are older than 18 have you considered researching for example a ten year bond or similar?

There may not be any that will allow you to open one for a child age 12 but if not you could open it 5 year one when they are 16

ih8stress

@poseidon1 - I have read a few similar threads and your comments

can you please advise what I need to ask the Solicitor about changing my Will (going tomorrow - 3rd June) with regard to my two Grandchildren inheriting all my money? as all the legal jargon confuses me.

It seems like the best scenario is to let them both be able to access it at the age of 18.

Do I need to add a 'survival clause'? as if either of them died before then I would like it to pass to the remaining grandchild.

If both of them died, I would like it to pass to their Father and not their Mother.

Do I set it up to be received Absolutely, no age specified, as a Bare Trust if one or both of them are still under 18 when I die?

If so, would the Bare Trust be the easiest and cheapest option for the Trustees to set up and manage?
ie in a Skipton Trust Account, or high interest Savings Account?

Thank you in advance :)

ih8stress

@mta999 - thanks, only just seen your reply as was typing out a question.

I am considering letting them have the money once reaching 18 now as anything else just seems too complicated or expensive for any Trustees to set up and manage, considering the 'low amount' (a huge sum to me but obviously not to everyone).

mta999

Yes that sounds reasonable to me and in any case I don't think there are any mainstream long-term bonds that would suit your purpose

It should be easier to find a five year bond that can be opened in their name when they are 16

silvercar

You can gift any amount you like. £3k is tax free, but gifting more can never put your estate in a worse situation than if you hadn’t gifted, it just means the amount over £3k is included in your estate.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82020184#Comment_82020184

Trouble is that I think I can only 'gift' £3,000 a year - unless I live more than 7 years afterwards.
(need to look into this properly as I definitely don't have enough for IHT issues, so may be able to leave any amount, even if I died within the 7 years).

Firstly legally you can give as much as you like to who you like.

If you die within 7 years of making the gift, it will still be counted as being in your estate for IHT calculation purposes. So as you say if your estate is unlikely to be liable for IHT anyway, this does not matter.

In any case even if your estate was liable for some IHT, you would be in no worse position than if you had not made the gift in the first place. Then if you live 7 years it is ignored anyway.

As a single person, you have a 'nil rate band' of £325K ( means below that your estate pays no IHT) . If you were married and your spouse has died, you also inherit their £325K nil rate band , so £650K in total. Then if you own your own home and leave that to your children you get another £175K ( and £175 K inherited from a spouse, if you had one) In that case a total of One Million Pounds.

The £3K gift allowance is separate, but as you can see you can make bigger gifts, usually with no negative implications.