Locking it away until she is 24

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  • Malthusian
    Malthusian Posts: 10,938 Forumite
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    cloud_dog wrote: »
    Is there any reason not to place the monies in to a 5 year fixed deal prior to 18.

    Yes - the failure of the trustee to consider the needs of the beneficiary, and the fact that the OP would have to cough up £10,000 of their own cash if the beneficiary asked for their money.

    Same applies to putting the money in a pension, only even worse.
    Flobberchops wrote:
    Obviously this is a thorny subject and it seems there is a real gap in the market for a children's investment vehicle that doesn't grant access at 18.

    There is no gap in the market as "people who want to violate their legal duties as trustees" is not a profitable target market.
    "When you were little your auntie gave you some money on the understanding it would be yours to spend when you're 24. Now, according to the law the control of this money transfers from me to you when you turn 18, so we need to talk about what would be the best way to keep the money safe and earning interest until it's ready to use. You could go against your aunt's wishes and spend it before then but I hope you understand that this is a lot of money and that you should take her wishes seriously. Here, let's read about ISAs..."?

    This is extremely sensible advice. This conversation should have taken place at least two years ago. But no time like the present.
  • cloud_dog
    cloud_dog Posts: 6,044 Forumite
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    Malthusian wrote: »
    Yes - the failure of the trustee to consider the needs of the beneficiary, and the fact that the OP would have to cough up £10,000 of their own cash if the beneficiary asked for their money.
    I will accept I am no legal expert but (having said that)... Are we not confusing 'ownership' of the money with access to the money.

    In my scenario (again I'm looking at it from a practical rather than a black and white legal perspective), the child still 'owns' the money and has the right to the money but in line with the original wishes the money is not accessible until 22 (in my scenario)? Or, has the act of placing the monies in to the bare trust negated whatever other 'financial responsibilities' (age 24) may have been associated with access to the money (not ownership thereof)?
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • IanManc
    IanManc Posts: 2,085 Forumite
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    cloud_dog wrote: »
    I will accept I am no legal expert but (having said that)... Are we not confusing 'ownership' of the money with access to the money.

    Ownership of the money at 18 brings with it the right of access to it, to move it, or to spend it. The money is the absolute, unrestricted property of the daughter at 18.

    The trustee doesn't have any right to impose their, or someone else's, restrictions on the money after the date when the owner becomes legally entitled to bring a bare trust to an end.
  • cloud_dog
    cloud_dog Posts: 6,044 Forumite
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    So the act of placing the money in to the bare trust has, in essence, negated any other sort of trust instructions.
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • Malthusian
    Malthusian Posts: 10,938 Forumite
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    cloud_dog wrote: »
    So the act of placing the money in to the bare trust has, in essence, negated any other sort of trust instructions.


    Any trust instruction along the lines of "to be held in trust for my niece until she is 24" means the money is the niece's at 18. "For my niece" means it is her money and the last part is irrelevant.
  • cloud_dog
    cloud_dog Posts: 6,044 Forumite
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    Malthusian wrote: »
    Any trust instruction along the lines of "to be held in trust for my niece until she is 24" means the money is the niece's at 18. "For my niece" means it is her money and the last part is irrelevant.
    Interesting. I wonder if this may cause a lot of bequeaths to fall fowl of the 'law'?

    My mother has bequeathed some money to her grandchildren but I requested that she alter it so that the grandchildren receive some money from the will/at age 18, and the other component, £x of it, is given to the parents (myself / brother) for the benefit of GC1, GC2, etc, with any remaining monies to become the grandchild's at age 25.
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • Malthusian
    Malthusian Posts: 10,938 Forumite
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    cloud_dog wrote: »
    Interesting. I wonder if this may cause a lot of bequeaths to fall fowl of the 'law'?
    It does indeed. This is a perennial topic on the Deaths, Funerals and Probate board.
    My mother has bequeathed some money to her grandchildren but I requested that she alter it so that the grandchildren receive some money from the will/at age 18, and the other component, £x of it, is given to the parents (myself / brother) for the benefit of GC1, GC2, etc, with any remaining monies to become the grandchild's at age 25.
    The first part is the grandchildren's at 18. The second and final part may also be the grandchildren's at 18. It depends precisely on how the Trusts are set up by the Will and whether the grandchildren have an absolute entitlement to the capital or not. You need to talk it through with a solicitor who knows what they are doing.
  • cloud_dog
    cloud_dog Posts: 6,044 Forumite
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    The wording on the will states:

    I GIVE the sum of XXXXX pounds (£xxxx) to my said granddaughter GC1 on her 18th birthday with a further YYYYY pounds (£YYYY) to be held on trust for her by her father ME until she attains the age of 25 years or if he in his absolute discretion thinks it appropriate to give her the benefit of the money at an earlier date.

    This is repeated for the other grandchildren.

    This was drafted by a solicitor so hopefully we are covered?
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • xylophone
    xylophone Posts: 44,412 Forumite
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    further YYYYY pounds (£YYYY) to be held on trust for her by her father ME until she attains the age of 25 years

    It seems to me ( no expert) that the money to be held in trust by the father has "indefeasibly vested".

    http://www.completesuccession.com.au/page%2006.0.25.html


    and see
    https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem1563

    http://www.prescient-financial.com/docs/Bare%20trust%20returns.pdf

    The terms of the will do not say "if" she attains the age of 25 but when she attains the age of 25. That is to say, the money becomes hers under the terms of the will when it comes into effect? In the tragic circumstance that she were to die before reaching the age of 25, the money would fall to be treated as part of her estate rather than as the property of a Trust?
  • IanManc
    IanManc Posts: 2,085 Forumite
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    cloud_dog wrote: »
    The wording on the will states:

    I GIVE the sum of XXXXX pounds (£xxxx) to my said granddaughter GC1 on her 18th birthday with a further YYYYY pounds (£YYYY) to be held on trust for her by her father ME until she attains the age of 25 years or if he in his absolute discretion thinks it appropriate to give her the benefit of the money at an earlier date.

    This is repeated for the other grandchildren.

    This was drafted by a solicitor so hopefully we are covered?

    That's a discretionary trust, not a bare trust. It's different, and it will achieve its objective.
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