Locking it away until she is 24

My Sister (living) gave me £10,000 each for my two daughters with instructions that they cannot touch it until they are 24 year of age.
As the money is not mine I put it into savings accounts previously setup for my children which are looked after by my wife.
My eldest daughter will soon be turning 18 and will be legally entitled to have access to the account so I would like to move the £10,000 somewhere to uphold my living sisters wishes but find I cannot setup accounts or fixed term investments in my daughters name.
What can I do please?
Regards

Malcolm
«134567

Comments

  • ValiantSon
    ValiantSon Posts: 2,586 Forumite
    You can't do anything. The money is your daughter's and you have no rights to touch it whatsoever, and any attempt to do so would be fraud.
  • bowlhead99
    bowlhead99 Posts: 12,295
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    The two obvious choices are:

    1) Convey to your daughter the strict instructions from hey living aunt that she is not to touch the last £10,000 of the money which is sitting in her account until she is aged 24. Assuming you or your wife has spent the last 18 years bringing up your daughter to be respectful, there is no problem.

    2) Have your wife move the £10,000 from your daughter's account to an account controlled by you or your wife, to which your daughter does not have access. The perfectly reasonable grounds for doing that, are that the money was only in your daughter's account in the first place due to an administrative error where you and wife had not understood the instructions correctly and had put the gifted money somewhere where your daughter would automatically be able to spend it at 18, rather than holding it in line with the actual wishes of your sister. To correct the error, you are removing it and will complete the gift process at age 24.

    If the age of access had been 20-23 you could probably have found a "no access" deposit account and put it there in the name of your daughter so she could have it to spend then. There may not be any such accounts with exactly six or seven year maturities because up to five years is what you generally find in the savings market.

    An alternative approach is to set up a proper trust arrangement but will incur costs which are probably not welcome when the sum involved is only £10k.
  • ValiantSon
    ValiantSon Posts: 2,586 Forumite
    edited 12 May 2018 at 6:03PM
    bowlhead99 wrote: »
    2) Have your wife move the £10,000 from your daughter's account to an account controlled by you or your wife, to which your daughter does not have access.

    The daughter is the beneficial owner of the account. Doing this would be theft.
    bowlhead99 wrote: »
    The perfectly reasonable grounds for doing that, are that the money was only in your daughter's account in the first place due to an administrative error where you and wife had not understood the instructions correctly and had put the gifted money somewhere where your daughter would automatically be able to spend it at 18. To correct the error, you are removing it and will complete the gift process at age 24.

    Nope, not reaonable at all. The money was given to the daughter and it became hers. If the aunt had wished to set up such an arrangement she should have created a discretionary trust.
    bowlhead99 wrote: »
    If the age of access had been 20-23 you could probably have found a "no access" deposit account and put it there in the name of your daughter so she could have it to spend then. There may not be any such accounts with exactly six or seven year maturities because up to five years is what you generally find in the savings market.

    Also dodgy, as the daughter has an absolute right to the money and acting in this way could comfortably be challenged.
    bowlhead99 wrote: »
    An alternative approach is to set up a proper trust arrangement but will incur costs which are probably not welcome when the sum involved is only £10k.

    No, they can't do that because the money is already the daughter's property. Only the daughter can create a discretionary trust for this money. Doing so would, however, be loopy.

    By the way bowlhead99, which type of hat did you eat in the end?
  • xylophone
    xylophone Posts: 44,139
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    Have your wife move the £10,000 from your daughter's account to an account controlled by you or your wife, to which your daughter does not have access.

    This is simply not correct procedure.

    The money appears to have been an absolute gift to the daughter - the aunt's wish would not seem to make the arrangement anything other than a bare trust.

    The gift was not made on "If she attains the age of 24" - she has a vested interest and therefore as this is a bare trust, the daughter has an absolute right to access and control at the age of 18.

    https://www.gov.uk/hmrc-internal-manuals/trusts-settlements-and-estates-manual/tsem1563
  • kidmugsy
    kidmugsy Posts: 12,709
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    edited 12 May 2018 at 8:08PM
    There appear to have been two instructions from the aunt. (i) This is for the children, but (ii) they are not to have it until they are 24.

    I can see why the OP would like to honour both. Indeed if he is to ignore one why should he not ignore the other?

    Perhaps he should return to his sister for further instructions. Maybe she will instruct him to invest it in an Investment Trust share plan under his own name but with the girls nominated as beneficiaries. I gather that the Baillie Gifford scheme supports such arrangements.
    Free the dunston one next time too.
  • ValiantSon
    ValiantSon Posts: 2,586 Forumite
    kidmugsy wrote: »
    There appear to have been two instructions from the aunt. (i) This is for the children, but (ii) they are not to have it until they are 24.

    I can see why the OP would like to honour both. Indeed if he is to ignore one why should he not ignore the other?

    Perhaps he should return to his sister for further instructions. Maybe she will instruct him to invest it in an Investment Trust share plan under his own name but with the girls nominated as beneficiaries. I gather that the Baillie Gifford scheme supports such arrangements.

    You are missing the point. The money is already in accounts of which the children are beneficial owners. The money is there's and that is the end of the matter. If the OP had held the money in accounts in his own name until they were 24 that would be a different matter, but he didn't. He cannot change his mind now about the course of action. It is irrelevant what the sister now wants him to do; she gave the money away and therefore surrendered control over it. The money belongs to his children and he has no right to move it to another account where they cannot access it. This isn't about morality, it is about legality.
  • bowlhead99
    bowlhead99 Posts: 12,295
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    edited 12 May 2018 at 8:39PM
    ValiantSon wrote: »
    The daughter is the beneficial owner of the account. Doing this would be theft.
    The money is only in the account due to administrative error. The wife controls the account and from a practical perspective could instruct the money to be moved to correct the position.

    If there is doubt that the daughter as beneficiary of the account contents would consent to the position being corrected; the wife can always consult with the daughter to ensure the daughter doesn't object to the money that her auntie doesn't want her to access being out of reach of her access until the age at which she was supposed to get access. If the daughter objects she can keep the money and use it to go and live her life somewhere else on her own. It might be a useful life lesson.
    Nope, not reaonable at all. The money was given to the daughter and it became hers. If the aunt had wished to set up such an arrangement she should have created a discretionary trust.
    Well, the aunt was clear that the money could not be touched by the daughter until 24 so it could not have possibly been intended to have been put into an arrangement where she would have absolute entitlement to the money at 18.

    It's a mistake by the father, who should have said, "ok, thanks for the gift which you'd like me to pass on to my daughter's in the future, I'll give it on to my daughters at the appropriate age", or "ok, let's fill out some paperwork for a discretionary trust so that the trust can pay tax instead of me".
    Also dodgy, as the daughter has an absolute right to the money and acting in this way could comfortably be challenged.
    Not 'comfortably' challenged; quite uncomfortably and expensively challenged, for someone aged 18, who only has an absolute right to the money because it was accidentally placed into her account, by the wife -who could fix the mistake by taking it out again.
    No, they can't do that because the money is already the daughter's property.
    Only by accident though. None of us were there to hear what the aunt said to the father when giving him £20k to give to his daughters in due course, to see whether there was an implication that the £10k was immediately and indefeasibly vested in the daughter at that point.

    From what the OP said, the auntie didn't want the money to become the absolute property of the daughter at the time it was given to the father, because there was a key requirement that there could be no access before a certain age (well over the age of majority).
    By the way bowlhead99, which type of hat did you eat in the end?
    You may be referring to the thread in which its OP had told us the Skipton BS had said that members would receive their 2017/8 LISA bonuses by 5 May and enquired whether other customers had received it yet (18 Apr). I said if they had (given the deadline for Skipton to report to HMRC was 19 Apr and the commitment to credit customers' accounts was not for more than two weeks), I would eat my proverbial hat if they had.

    In the end, no Skipton customers reported receiving their bonus until 25 April so no hat consumption was required on my behalf.
    xylophone wrote: »
    This is simply not correct procedure.

    The money appears to have been an absolute gift to the daughter - the aunt's wish would not seem to make the arrangement anything other than a bare trust.
    Certainly, the aunt gave it away and it wasn't *her* money after that point.
    The gift was not made on "If she attains the age of 24" - she has a vested interest and therefore as this is a bare trust, the daughter has an absolute right to access and control at the age of 18.
    The £20,000 was given to the father "for" the daughters. With an instruction or request that it should be given to the daughters after a particular date. Certainly one interpretation would be that the money belongs to the father until the father gives it to each of the daughters many years later like his sister requested.

    The fact that the father (or wife) dumped the money into the daughters' accounts immediately is something I would play off as a clear error.
    Yes, I'm aware that we both know what a bare trust is. My comments were to help the OP find a way out of the predicament in which he found himself, due to what I'd generously describe as 'mistakes of the past'.

    Or you can play hardball and say it's the daughters money right now because it accidentally got paid into one of her accounts, despite the clear intention of the settlor to the contrary.
  • bowlhead99
    bowlhead99 Posts: 12,295
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    edited 12 May 2018 at 8:51PM
    ValiantSon wrote: »
    If the OP had held the money in accounts in his own name until they were 24 that would be a different matter, but he didn't. He cannot change his mind now about the course of action. It is irrelevant what the sister now wants him to do; she gave the money away and therefore surrendered control over it. The money belongs to his children and he has no right to move it to another account where they cannot access it. This isn't about morality, it is about legality.
    The account is legally controlled by someone other than the daughter and has received some £10,000 of cash that it shouldn't have received. The legal custodian of the account can return the funds and reverse the error. Without prejudice, the person who deposited it there (the father or wife) might say to please keep the interest that was generated in the meantime.

    You are certainly correct that the aunt/sister gave the money away and doesn't have access, control or rights over the money. She surrendered that control to the father, suggesting that he gift it to daughter at an appropriate age. He accidentally gave it his wife who put it in the 'wrong' account - the daughter's account. That problem could be reversed by the wife now putting it in the correct account (and the father making sure appropriate taxes were paid on interest earned in the past if that has been overlooked due to the error)

    If the daughter thinks that's wrong, the daughter could go to court and challenge it, which she won't. Some parties might think that as the reason she won't go to court is because of her lack of willingness, financial resources or knowledge of the law, she had been immorally screwed over. However, as you point out, it "isn't about morality" so that's fine, right?

    And if it *is* about morality, the gift made by the sister on condition the daughter doesn't get access until age 24, should not be considered to have absolute entitlement for the child at 18 or any younger, because absolute entitlement allows access prior to age 24.
  • xylophone
    xylophone Posts: 44,139
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    There may not be any such accounts with exactly six or seven year maturities
    https://www.shawbrook.co.uk/personal/savings/fixed-term-accounts/7-year-fixed-rate/

    https://uk.investing.com/economic-calendar/rpi-267

    https://www.ons.gov.uk/economy/inflationandpriceindices

    Why not have a discussion with the young woman concerning using the money for a LISA/ISA for her future?
  • ValiantSon
    ValiantSon Posts: 2,586 Forumite
    edited 12 May 2018 at 9:44PM
    bowlhead99 wrote: »
    The money is only in the account due to administrative error. The wife controls the account and from a practical perspective could instruct the money to be moved to correct the position.

    No, you are wrong about this. The daughter is the beneficial owner. There is no way that you can prove the "administrative error". The sister's verbal instructions are irrelevant as the OP chose to pay the money into a savings account in his daughter's name. The wife controls the account as a trustee. Trustees are required to act in the best interests of the beneficial owner. [STRIKE]Stealing [/STRIKE] Putting the money in an account in somebody else's name is not acting in their best interests.

    You are wrong.
    bowlhead99 wrote: »
    If there is doubt that the daughter as beneficiary of the account contents would consent to the position being corrected; the wife can always consult with the daughter to ensure the daughter doesn't object to the money that her auntie doesn't want her to access being out of reach of her access until the age at which she was supposed to get access. If the daughter objects she can keep the money and use it to go and live her life somewhere else on her own. It might be a useful life lesson.

    You are changing your argument. I said nothing about whether or not they could ask the daughter not to touch the money. What they cannot do is take the money away from the daughter. She has absolute right to that money. If she consents to placing it in a fixed rate savings account for five years, and then a further one, then that is her choice, but the parents cannot do this. It is up to the daughter to decide.

    I'm glad that you aren't my parent if you would throw me out of home because I didn't want to hand over £10,000 of my money to your tender care!
    bowlhead99 wrote: »
    Well, the aunt was clear that the money could not be touched by the daughter until 24 so it could not have possibly been intended to have been put into an arrangement where she would have absolute entitlement to the money at 18.

    Wrong again. The aunt had every opportunity to set up a trust that would have allowed her to restrict access until the OP's daughter attained 24 years of age. She didn't take this action, and instead gave the money to her brother, who in turn gave it to his daughter. That's the end of it: the money has been gifted and the aunt no longer has any say in the matter.
    bowlhead99 wrote: »
    It's a mistake by the father, who should have said, "ok, thanks for the gift which you'd like me to pass on to my daughter's in the future, I'll give it on to my daughters at the appropriate age", or "ok, let's fill out some paperwork for a discretionary trust so that the trust can pay tax instead of me".

    It may be a mistake by the father (although really the mistake lies with the aunt by not taking more care), but that is now irrelevant.
    bowlhead99 wrote: »
    Not 'comfortably' challenged; quite uncomfortably and expensively challenged, for someone aged 18, who only has an absolute right to the money because it was accidentally placed into her account, by the wife -who could fix the mistake by taking it out again.

    Clearly I was using the word "comfortably" to mean that it would be resolved in the daughter's favour. And no, the wife couldn't take the money out of the account and put it into her own as that would be theft. Do you have other people's money "resting" in your account?
    bowlhead99 wrote: »
    Only by accident though. None of us were there to hear what the aunt said to the father when giving him £20k to give to his daughters in due course, to see whether there was an implication that the £10k was immediately and indefeasibly vested in the daughter at that point.

    All completely irrelevant. The situation is that the money does belong to the daughters. If I, being of sound mind, give someone some money and tell them it is to be used in a certain way, I have no legal rights over that money any longer and they can use it however they wish. I cannot, at a later date, say that they must return the money to me because they didn't use it the way I wanted them to. It was a gift and in such you lose all existing rights over the money.
    bowlhead99 wrote: »
    From what the OP said, the auntie didn't want the money to become the absolute property of the daughter at the time it was given to the father, because there was a key requirement that there could be no access before a certain age (well over the age of majority).

    It doesn't matter how many times you say it, this is still irrelevant.
    bowlhead99 wrote: »
    You may be referring to the thread in which its OP had told us the Skipton BS had said that members would receive their 2017/8 LISA bonuses by 5 May and enquired whether other customers had received it yet (18 Apr).

    Yes, I was.
    bowlhead99 wrote: »
    I said if they had (given the deadline for Skipton to report to HMRC was 19 Apr and the commitment to credit customers' accounts was not for more than two weeks), I would eat my proverbial hat if they had.

    In the end, no Skipton customers reported receiving their bonus until 25 April so no hat consumption was required on my behalf.

    :rotfl: You really are a sore loser aren't you!

    On 18th April, aj23 asked if anyone had received their bonus yet: https://forums.moneysavingexpert.com/showthread.php?p=74209249#1

    On the same day you replied that you would eat your hat if anyone had received the bonus: https://forums.moneysavingexpert.com/showthread.php?p=74209249#3

    The clear implication of your post was that nobody could expect to receive the bonus anytime soon, and certainly not before May. You are now trying to weasel out of it.

    I know you will write another inordinately long post to argue against this, so don't bother. Have it your way.
    bowlhead99 wrote: »
    Certainly, the aunt gave it away and it wasn't *her* money after that point.

    Alleluia, you have seen the light!
    bowlhead99 wrote: »
    The gift was not made on "If she attains the age of 24" - she has a vested interest and therefore as this is a bare trust, the daughter has an absolute right to access and control at the age of 18.[/quote]
    The £20,000 was given to the father "for" the daughters. With an instruction or request that it should be given to the daughters after a particular date. Certainly one interpretation would be that the money belongs to the father until the father gives it to each of the daughters many years later like his sister requested.[/QUOTE]

    I've bolded the salient points for you. The money does not belong to the aunt and she surrendered all rights over it the day she gave it away. The father then gave it to his children and, likewise, he surrendered all rights over it too. The request is just that: a request. It is not legally binding and the daughters are the owners of the money.
    bowlhead99 wrote: »
    The fact that the father (or wife) dumped the money into the daughters' accounts immediately is something I would play off as a clear error.

    You would lose the case in court. The money is the property of the daughters. That really is the end of it.
    bowlhead99 wrote: »
    Yes, I'm aware that we both know what a bare trust is. My comments were to help the OP find a way out of the predicament in which he found himself, due to what I'd generously describe as 'mistakes of the past'.

    Your suggestions encouraged the OP and his wife to engage in a conspiracy to defraud. You meant well, I'm sure, but you were grossly misguided.
    bowlhead99 wrote: »
    Or you can play hardball and say it's the daughters money right now because it accidentally got paid into one of her accounts, despite the clear intention of the settlor to the contrary.

    That would be the legal position.
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