Keeping a little bit of parental control post 18
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LesleyWylie
Posts: 2 Newbie
Hi everyone, my twin sons’ kids savers are coming to an end at age 17. They already have a lump sum in a junior ISA which they’ll get at 18, and I’d like to keep a little control over the rest. It’s about £20k so enough for something big, like a house deposit , or to help with tuition fees. I don’t want to put it in my own name solely, or their dads.
The best thing I can come up with is to put it in a savings account with joint names - my son and their dad - with transactions needing both signatures. And popping it in a 5 yr fixed savings so no one can touch it til they’re 22, and at that point they’ll have to have a conversation with their dad anyway. Can’t find many fixed accounts that 17 yr olds can open but nationwide do one at 1.75% fixed for 5 yrs. I know it’s not the most brilliant use of funds interest-wise, but the main aim is to find something they can open at age 17, and to sort of have a parental veto option if we think they aren’t ready to take full control by age 22, which hopefully they should be. Just being cautious!.
Anyone think this isn’t a good idea, any pitfalls, any better suggestions?
Thank you so much ! Xxx
The best thing I can come up with is to put it in a savings account with joint names - my son and their dad - with transactions needing both signatures. And popping it in a 5 yr fixed savings so no one can touch it til they’re 22, and at that point they’ll have to have a conversation with their dad anyway. Can’t find many fixed accounts that 17 yr olds can open but nationwide do one at 1.75% fixed for 5 yrs. I know it’s not the most brilliant use of funds interest-wise, but the main aim is to find something they can open at age 17, and to sort of have a parental veto option if we think they aren’t ready to take full control by age 22, which hopefully they should be. Just being cautious!.
Anyone think this isn’t a good idea, any pitfalls, any better suggestions?
Thank you so much ! Xxx
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Comments
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Not a good idea, plenty of pitfalls and leaves you open to legal action by the children.
What if they don't want to play your game? As things stand they are fully entitled, as adults, to get the money at 18.0 -
Exactly, the moment they become 18, the money is theirs.
You could of course ask them if they need any advice on investingmake the most of it, we are only here for the weekend.
and we will never, ever return.0 -
You have held these accounts in bare trust for your sons.
They have the absolute legal right to access and control at the age of 18.
Perhaps each of your sons could open a Smart Limited Access account and you could deposit the money in those.
https://www.nationwide.co.uk/products/savings/smart-limited-access/features-and-benefits
When they reach age 18 you might encourage each of them to open a LISA?0 -
If you really feel the need to control the cash, and if the kids can't do anything with it until reaching 17 (junior saver) is it possible for you in your capacity as trustee to close the account before their 17th birthdays and then put it into a 5 year account in their names? That would get you near to 22 before the cash can be accessed. Don't know about the rights and wrongs of adding a joint signatory though.
You obviously know your kids better than any of us do, so what is it that is making you so worried about them blowing it?0 -
I would think as a bare trust op would not be in a position legally to tie up the money until after it legally becomes theirs.
What would you do if one of them insisted on having their money at 18 which is their right?0 -
You could always bribe them with the promise of more cash in the future if they use the 20k according to your wishes.0
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Thank you to everyone for your replies - very helpful xxx
It!!!8217;s not that I don!!!8217;t trust my sons, it!!!8217;s that I know £20k could disappear so easily on nothing over 3 years at uni. Also I!!!8217;d like them to learn to manage on student money, and have to work to top it up, like everyone else does. Not be tempted to dip into this for everyday living costs. They will in any case have £8k from an isa which is there at 18 for them. That feels enough, and more than most kids would have.
I think I!!!8217;ll simoly talk to them, explain this, and suggest the 5 yr bond, but in their sole name.
You have also put my mind at rest. I understood how junior ISAs belong to the child, but I didn!!!8217;t understand that a child account is a bare trust. I have been trying to find out if the money in a child account mine or theirs legally, for inheritance tax purposes, because I!!!8217;ve recentky had an incurable diagnosis. It would have been very annoying if all this money I!!!8217;d saved since they were tiny was !!!8216;mine!!!8217; and therefore Liable to 40% iht when I die. If I!!!8217;m holding it in bare tryst, and it!!!8217;s theirs, I don!!!8217;t need to worry about that. The bank customer advisors have been rubbish at clarifying this for me! Thank you again xxx0 -
I like jamei's suggestion. "I'll gift you £1k for every £2k of yours that you save in a way I approve of" might work wonders. Perhaps you could use that to encourage putting some of the money into LISAs, say.Free the dunston one next time too.0
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I'm so sorry to hear of your diagnosis - I have an inkling how that feels. Best of luck with whatever you do.0
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