Bare trust for my two children

kdean83

hello

Banging my head against a brick wall here 😂

My children’s father passed away last year, they are aged 11 and 14. He has a pension with pensionbee. Pensionbee have advised that this can only be paid into a bare trust account. Whilst dealing with my children’s grief I’m finding this really confusing to deal with. I instructed a financial advisor to act on my behalf , but pensionbee won’t discuss any of this with him. It all has to go through me. I’ve been told that I need to sort out a trust deed. Financially I am not in a position to do this. I’m currently looking at Hargreaves’s lansdown bare trust account. I know nothing about investing so want to be sure I’m doing the right thing with their money and initially want to just let it sit in an account to begin with. Do Hargreaves’s lansdown let you do a trust deed with them as part of the application process? Or is this something that really has to come from a solicitor? Any advice on any other recommended providers would be great also

xylophone

Each child is entitled to a lump sum from their late father's pension.

As both are under age 18, (when each of them is entitled to access and control) the administrator requires that the monies should be held in a Trust Account for each child.

It could be wise for you and another adult to be named as Trustees.

You ask about HL.

https://www.hl.co.uk/investment-services/investing-for-children/bare-trust-account

Otherwise, this may be of interest.

https://www.mansfieldbs.co.uk/saving/trust-savings-accounts/

See also this concerning when registration is/is not required.

https://www.gov.uk/hmrc-internal-manuals/trust-registration-service-manual/trsm23160

poseidon1

I would go along with the HL bare trust option as the more beneficial structure on offer. The deceased father should be deemed settlor of the trust funds.

It is a well thought out trust document, which gives the bare trustee the power to make withdrawals on behalf of the beneficiary where such withdrawal can be demonstrated as wholly and exclusively in the interest of the beneficiary. That power could possibly open door to a parent sponsored Junior ISA.

If not, the OP could still access very low risk money market funds within an HL bare trust account, which might certainly be the best option for the 14 year old within 4 years of the age 18 vesting age. For context Royal London' short term money market fund currently yielding annually between 3.8% to 4% ( fluctuating ).

If monies per child exceeds £10,000, sadly it appears trust registration with HMRC maybe required

https://www.gov.uk/guidance/check-if-you-need-to-register-a-trust

Incidentally not sure societies like Mansfield can assist here. Although they offer bare trust accounts they do require a bare trust document to be in exsistence as a criteria for opening an account. They certainly don't provide bare trust templates themselves.