Children inherited money

RiderOnTheStorm

Thank you for the comments.👍️

Yes its an inheritance from grandparents. My parents, specified in their will, that a particular account of theirs was to be used to pay funeral expenses (this has been done - mum has passed and dad has a paid up funeral plan in place) and then the balance was to be split between the two children. I am the executor of the will and the childrens' dad.

Both children have a JISA (again courtesy of the grandparents). They also have kids savings accounts through the Halifax set up by us.

Ideally want to keep the pots seperate so I can state to the children that this money is from us (the parents) and this money (is from one set of grandparents)

My initial thoughts was to split it between a stock/share ISA and a cash ISA.

xylophone

They also have kids savings accounts through the Halifax set up by us.

You mean that you and or your spouse are making monetary gifts to your minor unmarried children outside their JISAs?

Are you aware of the "£100 rule"?

https://www.gov.uk/savings-for-children

It might be wise for gifts from you and your spouse to be made to JISA accounts while the bequests are held elsewhere?

For example, Kent Reliance is currently offering 4.18 % on the account for under 18s.

silvercar

if Dad is still alive, he could change his will. They can’t inherit when he’s alive. Also, some of these funeral plans don’t pay out in full.

UncleK

in 1979 I got £825 or so when I was 18 from my great grandfather, who had died about ten years before that and left various amounts to his descendants and those under 18 got control when they were 18. It was in a building society account - inflation was rampant - it started at £500. My parents weren't too impressed but I went out and bought a motorbike. Hardly a classic investment move, but (as you can imagine) it was exactly what I wanted. And I turned out alright (at least, from a sensible financial point of view, innit).

Just trying to give the 18 year old's perspective…………….

Tim_L

JISA for me, and at a reasonably high risk tolerance. It either forms a basis for savings later in life or for expenses for higher education, or backpacking, or whatever they like; they can even roll it into pension contributions later. The 16 year old should absolutely be part of the decisions around accessibility and risk, the 12 year old probably won't be but it's a good time to start their personal finance education!

I can see no benefit at all for putting it into a pension; no tax relief, and it becomes very difficult to access. Grow it in a JISA, decide later, can't see a downside at all.

Grumpy_chap

Yes its an inheritance from grandparents. My parents, specified in their will, that a particular account of theirs was to be used to pay funeral expenses (this has been done - mum has passed and dad has a paid up funeral plan in place) and then the balance was to be split between the two children. I am the executor of the will and the childrens' dad.

I may have misunderstood.

It sounds like Grandma had a Will saying the money in joint account X is to be used to pay for Grandma's funeral and for Grandad's funeral. Whatever is left is to be split between two Grandchildren.

Then Grandad had a Will saying the money in joint account X is to be used to pay for Grandad's funeral and for Grandma's funeral. Whatever is left is to be split between two Grandchildren.

Grandma has died and her funeral has been paid for from the joint account X. The balance of joint account X passes to Grandad for him to do with as he sees fit. So Grandad purchased a funeral plan from account X and gifted the balance to the two Grandchildren.

Is that correct?

This might seem like pedantics, but it does make a difference if IHT is a factor in the Estate and / or if Grandad might need care and DoA comes into consideration.

Enzo_L

https://forums.moneysavingexpert.com/discussion/comment/82130510#Comment_82130510

You say "My parents specified in their will …….".

While you can make a single joint will in the UK, they are very, very rare. Solicitors hate them and generally won't draw them up.

https://forums.moneysavingexpert.com/discussion/comment/82130707#Comment_82130707

If there actually is a joint will, then the Dad cannot make a new will after the Mum's death as the joint will is legally binding on the survivor, no matter how long he or she lives.

I sincerely hope there isn't a joint will, and what the parents actually drew up are mirror wills, where each of them made a will mirroring the provisions of the other. That's what couples usually have, and invariably they are what solicitors advise couples to have. The surviving spouse is entirely free to make a new will in that case.

If there are mirror wills then I am doubtful that they were professionally drawn up because the contents of a joint bank account do not pass under a will but become the property of the person who is still alive by survivorship (although half the money in the account is usually only counted as part of the deceased's estate for inheritance tax purposes) consequently a joint account wouldn't get a mention in a professionally drawn will.

If there are mirror wills the provision in the wills relating to the contents of the joint account are a nullity because a will cannot override the rule of survivorship; and in that case what has actually happened is that on Mum's death the contents of the joint account became Dad's, Dad has bought a funeral plan, and then Dad has gifted the rest of the money to the grandchildren, 50% each.

cloud_dog

https://forums.moneysavingexpert.com/discussion/comment/82130510#Comment_82130510

Ours received a small inheritance and as they reached age 18 we discussed the inheritance money. As they were off to University it was decided to put it onto their ISA but use a separate investment fund (same strategy index) so they could relate it back to their grandparents.

After University they didn't have an immediate need for the inheritance money so it was moved into their LISA, but again was invested in a different fund (same index) to differentiate it from other invested money (theirs / ours). At the moment it is from a sentimental perspective but they like to see how much their grandparents are assisting them.