Bare Trust

gizchloe

hi I’m looking for some advice. I’m executor of my late Uncles will and he has left 15k to my son and 15k to my nephew when they turn 18 which is 4 years time. I am classed as trustee as executor. I’ve been trying to set up an account to put the money in which is proving difficult as only certain banks do Trust Accounts. Can I just put it in a junior ISA for example and tie it up until 18 ? I have registered it as a trust with HMRC but the funds are sat in an executor account at the moment. Any advice is welcomed.

poseidon1

The all important question is whether there was a survivorship provision, that required each child to survive to age 18 before becoming absolute entitled to their legacies.

Such a provision would exclude JISAs since the child has to be entitled to their legacy without any contingent limitations.

If there are no such limitations then you are certainly free to consider JISA for your own son, although you would need to be happy for your Nephew's parents take direct responsibility for his JISA since you can't set that up.

Does the will give you authority/ dispensation to pass the Nephew's funds to his parents to hold on his behalf, this would be by way of a parental ' good receipt' clause.

gizchloe

Hi thanks for your response that’s so helpful.there are no contingent limitations it just states I give the following pecuniary legacies the sum of …to my great nephew upon attaining the age of 18. It does not say that there is authority to pass on to his parents. It just states that I am appointed a trustee and executor.

poseidon1

OK , then you are fine to set up and fund a JISA for your son.

However, in the absence of the dispensation clause permitting you to simply hand over the Nephew's funds to his parents for them to handle on his behalf, you will be trusting them to do the right thing by him or monitor what they are doing periodically until age 18.

Reason for this is without the protection of the dispensation clause, if the Nephew's parents misappropriate or mismanage his money, he can pursue you the original executor/trustee for any losses he might sustain.

Incidentally unless you opt for a stocks and shares JISA best of luck finding a suitable cash JISA. These seem to be as rare as trustee savings accounts, with only NSI seemingly offering a decent online product . The others appear to be a small handful of postal or branch based building societies.

gizchloe

thanks yes I’ve discovered that very few banks offer a trust account. The only one that will deal with me is metro with an account cost of 160 pounds and a 5.00 monthly fee. When all that will happen is the 15k will sit there. However, I don’t trust my sister to manage the funds and it not coming back to me. So it looks like my only choice is to open up a Trust Account. I had hoped to be able to open a fixed term account until 18, which could be managed by his parents but tied up until then.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82023754#Comment_82023754

One option you could consider for your Nephew is an NSI growth bonds for 3 or 5 years per link below -

https://www.nsandi.com/products/guaranteed-growth-bonds

However as a trust investment , it would need to be funded by a cheque from your executors account (NSI pretty old school in this respect), and the executors account retained to accept the maturity proceeds in due course - trust application form below -

https://www.nsandi.com/files/asset/pdf/guaranteed-growth-bonds-application-form-trustee.pdf

gizchloe

thank you for that I will have a look into it no problem with keeping executor account open.

xylophone

In terms of the will, it appears that the money immediately vests in each child (ie each child is the beneficial owner of the money). Each child is entitled to full access and control at the age of 18.

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

There is the above although the interest rate is poor.

You could consider opening one for each child and then opening a JISA for your own child (where a better although not exactly exciting rate is available) and asking your nephew's parents to open one for him if he does not have one already)?

Up to £9000 could be contributed to each ISA for this year and then the balance in each of the trust accounts in the next?

gizchloe

thanks @xylophone I had an appointment with Skipton in person last week and they said it can’t go into their Trust Saver with it being a will trust. Even though I spoke to the call centre first and they said I could. It’s been so tricky.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82024295#Comment_82024295

Useful to know Skipton's limitations on the kind bare trust's they will actually consider.

The pool of deposit takers who will take children's Will Trust derived monies seems to be shrinking.

Does not bode well for the ever increasing number of executors burdened with the task of looking after bare trust funds for minors.

Enzo_L

https://forums.moneysavingexpert.com/discussion/comment/82024295#Comment_82024295

The Skipton Children's Trust Saver can be opened and operated by "a close adult relative" until the child is 18.

Maybe you could try opening the account for your nephew as an uncle and not as an executor? Then you would fit the requirement.

Just an idea ……. 😊