Updating Will for money for Grandchildren query

ih8stress

Thanks @Albermarle and @silvercar - I will certainly look into gifting some money to them.

For now, I need to concentrate on exactly how I need to update my current Will, to prevent any tax/Trust problems with the age restrictions :)

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82020292#Comment_82020292

Since you have rightfully concluded that complex trusts make no sense for the modest sums you wish to bequest, then you definitely do not want to be incorporating any contingencies or any kind of survivorship provisions in your will, since to do so would militate against the operation of bare trusts for the grandchildren.

Given the extremely low mortality rates for children age 10 to 18 ( the rate is the lowest of all age brackets) you should not be overly concerned about either one dying before age 18.

You want the trustee to be in the position to deal with simple bare trusts for the grandchildren which requires them to do nothing more than hold the capital, get the best interest rate they can and then pass the accumulated monies ( in separate pots) to each child at 18. To this end it would very helpful if that trustee role could be delegated to the parent you trust which from what you have said appears to be the father of the children?

Accordingly, and to this end is that parent going to be an executor of your and reasonably financially literate? It would certainly simplify what you are trying achieve if this were the case.

ih8stress

@poseidon1 - thank you for your quick reply.

Yes, it is the Father (my Son) and also my sister-in-law who are the Trustees. They would be able to deal with opening bank accounts or similar, as long as it wasn't too complicated.

That is why I want to find out exactly what they would need to do, so that I can possibly put the instruction/guideline in my Will, to help them at a difficult time.

So as I understand it, they would need to open a separate Bare Trust account for both grandchildren.

Would this be something like a Skipton Trust Account, or high interest Savings Account?

I believe a JISA would be out of the question until they reach 18, in case they died and it went to their side of the family instead? but perhaps my Son could try and encourage them to open one once they were 18 (would it be a normal ISA at that stage?), instead of blowing it all on make-up and clothes, ha ha.

Maybe I could express a wish that they save the majority of it until a little older, and keep back a smaller amount to 'splurge' when they receive it - though I know this would only be a request.

How should my Will be worded for the above, please? Is it something like absolute?

Is it just a case of asking the Solicitor to exclude any age restriction or survivorship issue, and asking that my money be put into a Bare Trust if either of them are under 18 years of age when I die?

Thank you in advance :)

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82020933#Comment_82020933

The junior ISA ( JISA) would in fact be the easier option for your son to arrange for the grand children whilst they are under 18, since it gives immediate access to tax free accounts on their behalf which then convert to ordinary adult ISAs when they turn 18. JISAs are specifically for children under 18, and not something 18 year olds have access to.

Your concerns that the JISA or any other investment arranged on their behalf could partially accrue to the other half of the family if they died before 18 is not specific to dying under that age.

Should the grandchildren die at any age before and after 18 without having married, had children of their own or made a will themselves, their assets ( of whatsoever nature, cash, ISA etc) revert to the parents ( if living) by reason of the intestacy rules. As an example my friend's 50 year old single sister died intestate no children. Her entire estate reverted back to her widowed mother automatically.

As for possible wording of the clause in your will dealing with the gift, see sample below

"I GIVE the sum of £[Insert Amount] to my Trustees upon trust for [Name of Minor] absolutely, provided that if the said [Name of Minor] shall be a minor at my death, my Trustees may pay the whole or any part of the said sum to the parents or any guardian of [Name of Minor] to hold on Bare Trust for his/her absolute benefit until age of majority. The receipt of such parent or guardian shall be a full and sufficient discharge to my Trustees, who shall not be concerned to see to the application thereof."

ih8stress

Many thanks for your detailed reply @poseidon1 - I went to the Solicitor today to change my Will to a Bare Trust one, being drafted so not seen the legal wording yet.

I forgot to ask if a JISA/ISA can be set up to revert back to a specific parent but perhaps that is a question for the Bank anyway.

She says that I can do a 'Letter of wishes' to be put with my Will - obviously I understand this is not legally binding.

Regards

Keep_pedalling

If you are going to gift to you GC before your death then your will does not come into the equation.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82022200#Comment_82022200

I got the impression that the £40k in question was the OP 's entire cash wealth ( not spare cash) , and if so there shoul be no question of lifetime gifting of cash they might need for themselves. However I could be mistaken.

Grumpy_chap

It sounds like the OP's Estate will be "small", i.e. below the threshold for IHT to be a concern. As such, any issues around gifting £3k each year, or surviving 7 years are irrelevant. None of those reliefs / exception from IHT can make any difference if there is not going to be any IHT in any event.

Given the sums involved are "small", the best thing is to keep the Will simple and gift the money that is for the Grandchildren so that it is theirs on the OP's departure. It really is too low a value to be concerned with Trusts.

ih8stress

@Keep_pedalling - the money will be from my Will - I was just looking at the gifting/JISA options but as posidon1 quite rightly points out, there is a good chance I could need it for myself in the future.

@poseidon1 - yes it is the whole sum

@Grumpy_chap - yes, the reason for my post was to update my Will to a simpler version to avoid the complications and expense of Trusts issue because of the Age 21 restriction.

Though it will still need to be in a 'Bare Trust' if either of them are under 18 when I die.

Thanks again for all the replies.