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  • FIRST POST
    • MVA
    • By MVA 11th Feb 18, 5:57 PM
    • 1Posts
    • 0Thanks
    MVA
    Holding savings for someone
    • #1
    • 11th Feb 18, 5:57 PM
    Holding savings for someone 11th Feb 18 at 5:57 PM
    Hi,

    I recently received a large lump sum. I wish to give it to an elderly relative for safekeeping so that I will not be tempted to waste it.

    What is the best way to do this? Am I able to do this without transferring ownership of the monies?

    Thank you in advance.
Page 1
    • MallyGirl
    • By MallyGirl 11th Feb 18, 6:03 PM
    • 2,611 Posts
    • 7,604 Thanks
    MallyGirl
    • #2
    • 11th Feb 18, 6:03 PM
    • #2
    • 11th Feb 18, 6:03 PM
    No - and you might affect any benefits they might be eligible for. If they died while holding your money it might be included in their estate. If you really can!!!8217;t trust yourself then just put it in some form of fixed term account that allows no withdrawals
    • Eco Miser
    • By Eco Miser 11th Feb 18, 6:41 PM
    • 3,444 Posts
    • 3,234 Thanks
    Eco Miser
    • #3
    • 11th Feb 18, 6:41 PM
    • #3
    • 11th Feb 18, 6:41 PM
    Yes, it is possible - you lend them them money, interest free, making sure you document the transactions.
    If it's a very large amount, it would be possible to set up a trust with them as the trustee, but this would have complications and expenses.

    Or you could put the money in a passbook only (or card only) account in your name, and give them the passbook / card to hold.
    Eco Miser
    Saving money for well over half a century
    • Keep pedalling
    • By Keep pedalling 11th Feb 18, 6:48 PM
    • 4,831 Posts
    • 5,368 Thanks
    Keep pedalling
    • #4
    • 11th Feb 18, 6:48 PM
    • #4
    • 11th Feb 18, 6:48 PM
    You would be very foolish to do so. Now is the time to start to educate yourself on the value of investing for the future and to get a grip on your wastefull ways/
    • dawyldthing
    • By dawyldthing 11th Feb 18, 8:12 PM
    • 2,841 Posts
    • 2,854 Thanks
    dawyldthing
    • #5
    • 11th Feb 18, 8:12 PM
    • #5
    • 11th Feb 18, 8:12 PM
    Put it in premium bonds and hide the receipt. Put winnings in reinvest then leave well alone
    My targets to end 2018:
    1) To get down to 11 stone then treat to a safari. At start 17 stone 7 lbs *61lbs lost* *30lbs to go*
    Started SW16st13lbs tues11/7/17 - 38 weeks in -53lbs
    -> target 11 st 13lbs by mid June -> 11 weeks & 17lbs to go
    2) to find new challenges
    • Alexland
    • By Alexland 11th Feb 18, 8:49 PM
    • 2,229 Posts
    • 1,623 Thanks
    Alexland
    • #6
    • 11th Feb 18, 8:49 PM
    • #6
    • 11th Feb 18, 8:49 PM
    Maybe stick it in an AA savings account as they are so painful by the time they return the money you will have forgotten why you wanted it.

    But seriously putting it in another's name us not the right answer and brings complications. You know this money is important so put it in a long term savings account and almost forget about it.

    Alex
    • IanManc
    • By IanManc 11th Feb 18, 9:12 PM
    • 521 Posts
    • 847 Thanks
    IanManc
    • #7
    • 11th Feb 18, 9:12 PM
    • #7
    • 11th Feb 18, 9:12 PM
    Maybe stick it in an AA savings account as they are so painful by the time they return the money you will have forgotten why you wanted it.
    Originally posted by Alexland
    Excellent!

    • DigForVictory
    • By DigForVictory 11th Feb 18, 9:16 PM
    • 7,573 Posts
    • 21,599 Thanks
    DigForVictory
    • #8
    • 11th Feb 18, 9:16 PM
    • #8
    • 11th Feb 18, 9:16 PM
    t's OK not to trust yourself, but it is not OK to burden someone else with your self discipline issues.

    Says she with a bank card in the freezer and another passbook sealed & buried in the garden.
    • Zorillo
    • By Zorillo 11th Feb 18, 9:17 PM
    • 83 Posts
    • 50 Thanks
    Zorillo
    • #9
    • 11th Feb 18, 9:17 PM
    • #9
    • 11th Feb 18, 9:17 PM
    NSI three year "guaranteed growth bond" pays 2.2% but it will cost you 90 days interest. Based on a 10k deposit (you haven't said how much money is involved), it'd cost you approx 50 to withdraw it, which would hopefully be enough to make you reconsider a 'wasteful' purchase?
    • Zorillo
    • By Zorillo 11th Feb 18, 9:18 PM
    • 83 Posts
    • 50 Thanks
    Zorillo
    Sorry, should say 'would cost 90 days interest to withdraw it before the end of the 3 year term.
    • grey gym sock
    • By grey gym sock 11th Feb 18, 11:50 PM
    • 4,270 Posts
    • 3,787 Thanks
    grey gym sock
    Says she with a bank card in the freezer and another passbook sealed & buried in the garden.
    Originally posted by DigForVictory
    that shows your username in a new light
    • Naf
    • By Naf 12th Feb 18, 12:17 AM
    • 3,018 Posts
    • 2,281 Thanks
    Naf
    Aren't trustee accounts still a thing? Or an account which requires two signatures for a withdrawal?
    Never argue with stupid people, they will drag you down to their level and then beat you with experience.
    - Mark Twain
    Arguing with idiots is like playing chess with a pigeon: no matter how good you are at chess, its just going to knock over the pieces and strut around like its victorious.
    • bowlhead99
    • By bowlhead99 12th Feb 18, 7:10 AM
    • 7,689 Posts
    • 14,061 Thanks
    bowlhead99
    Aren't trustee accounts still a thing? Or an account which requires two signatures for a withdrawal?
    Originally posted by Naf
    You could create an account for a trust, but then OP needs to have a trust. You could create an account which requires multiple signatories if you have a club or society or company but then OP would need documentation for that. So all of those ideas create complications and expenses. You could create a joint account if you want to share the money, but OP presumably doesn't want to share the money , they want it still to be theirs but someone else control it. Presumably as it's a large sum they would still want to get the interest on it for themselves.

    Unfortunately unless you open a formal trust or company or club/society account, the banks' terms and conditions will always say that the money in the account will be treated from their perspective as belonging to the person who runs the account and puts it there, and they do not recognise nominee or private trust arrangements where one person is holding the cash in their name but it beneficially belongs to someone else.

    So, one way of doing it is just to loan the money to the elderly relative and properly document it. For inheritance purposes the loan owed back to OP would be taken off the value of the 'estate' and settled before any dividing up of the remaining assets - assuming there is actually enough money in the estate and the elderly relative didn't in the meantime accidently spend it or have it nicked by confidence tricksters or fraudsters. And assuming the executors or other relatives believed the loan documentation was genuine and not just constructed artificially by OP to get the relative's money as they became even more elderly or infirm or lost their marbles .

    However a problem with the relative holding substantial cash balances in some circumstances is that if they were hoping to receive means-tested benefits of some kind when large amounts of cash would scupper that; the loan wouldn't automatically be taken off the cash to give a 'real net cash' figure. The loan would have to be repayable on demand so you could settle it quick and avoid such problems (and be able to sue the relative if they got any funny ideas about not wanting to pay it back when you genuinely needed it).

    Also, if the loan has an interest rate it will be wasteful for tax as the relative will pay tax on the interest rate on 'their money' they get from the bank account and then OP will pay tax on the interest they get from their relative on the loan, while the interest expense for the relative is not tax-deductible. You could avoid the 'tax leakage' by documenting the loan just to be at 0%, but then OP doesn't have any legal right to any income from their substantial amount of money which will be disappointing as the value of the money declines in real terms due to inflation over time.

    So, none of the easiest solutions are ideal. Putting the money into different fixed term deposits with banks, or into accounts with limited access only a couple of times a year without penalty, could be a help. The usefulness of those sorts of things depends on whether the OP has some serious problems or addictions (eg drugs or booze or gambling or compulsive spending or whatever) which would override the threat of a 'penalty' for early access: "oh whoops I've withdrawn 1000, still I have thousands so I can afford to lose a bit of interest".

    Similarly if you know your relative has 20,000 cash belonging to you, and you go out and blow 15,000 on a credit card - if you said to the elderly relative "thanks for looking after my money, I now have a really important credit card bill which is charging me interest at 20% APR so can I get 15,000 back to settle the bill please", the relative would probably say yes unless they wanted you to suffer unncessarily. So, the 'giving money to someone else for safekeeping' trick is not necessarily going to solve all problems or reduce temptations.

    But for simple situations to avoid temptation a basic, well-documented, loan arrangement might make sense (despite the practical issues that could occur) and for a more complex situation where you need 'protecting from yourself' a more complex and expensive trust arrangement could be used with one or more people formally acting as trustee.
    • PasturesNew
    • By PasturesNew 12th Feb 18, 7:13 AM
    • 62,159 Posts
    • 363,886 Thanks
    PasturesNew
    Just open a simple savings account that has no online access .... and give them your passbook for safekeeping.
    • bowlhead99
    • By bowlhead99 12th Feb 18, 7:45 AM
    • 7,689 Posts
    • 14,061 Thanks
    bowlhead99
    Just open a simple savings account that has no online access .... and give them your passbook for safekeeping.
    Originally posted by PasturesNew
    If it's still your money though, and you can prove who you are, you can still get access to your funds even with a 'lost' passbook - if you don't mind the hassle. A more modern day equivalent would be to get an online account, but have someone else set up the online ID and password and security questions so that you don't get tempted to accidentally use it.

    In terms of putting some not-insurmountable-but-annoying-enough-to prevent casual use blockages in the way, the AA idea seems the best so far
    • k6chris
    • By k6chris 12th Feb 18, 8:13 AM
    • 209 Posts
    • 360 Thanks
    k6chris
    Hi,

    I recently received a large lump sum. I wish to give it to an elderly relative for safekeeping so that I will not be tempted to waste it.

    What is the best way to do this? Am I able to do this without transferring ownership of the monies?

    Thank you in advance.
    Originally posted by MVA
    How old are you? You could put some of it into a pension, which will not allow you to access it until 55? Sounds dull, but certainly one of the best things I have ever done.
    EatingSoup
    • DigForVictory
    • By DigForVictory 12th Feb 18, 9:41 AM
    • 7,573 Posts
    • 21,599 Thanks
    DigForVictory
    that shows your username in a new light
    Originally posted by grey gym sock
    Yes indeed, as mother of teenagers how else am I to get the back garden properly dug over?!
    • tara747
    • By tara747 12th Feb 18, 10:53 AM
    • 10,145 Posts
    • 26,733 Thanks
    tara747
    I'm honestly amazed that a grown adult can't trust themselves not to touch a bank account. I really mean that. It's astonishing.

    Anyway, some of the solutions above seem sensible.

    - Fixed term bond that can't be touched until maturity
    - Savings or current account with no online access, no card and the nearest branch is 100 mile away
    - Put it in a pension

    Good luck.
    Get to 119lbs! 1/2/09: 135.6lbs 1/5/11: 145.8lbs 30/3/13 150lbs 22/2/14 137lbs 2/6/14 128lbs 29/8/14 124lbs 2/6/17 126lbs
    Save 132,000 by 31 Dec 2018! 2011: 54,342 * 2012: 62,200 * 2013: 74,127 * 2014: 84,839 * 2015: 95,207 * 2016: 109,122 * 2017: 121,733
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    • eskbanker
    • By eskbanker 12th Feb 18, 1:06 PM
    • 6,796 Posts
    • 7,047 Thanks
    eskbanker
    I'm honestly amazed that a grown adult can't trust themselves not to touch a bank account. I really mean that. It's astonishing.
    Originally posted by tara747
    Not sure that's really the most helpful contribution to the discussion - have you never heard of gambling addiction for example? Or other addictions that require money for that matter? Or various medical conditions affecting judgment? Or people who simply find spending very tempting? etc, etc....
    • tara747
    • By tara747 15th Feb 18, 3:54 PM
    • 10,145 Posts
    • 26,733 Thanks
    tara747
    Not sure that's really the most helpful contribution to the discussion - have you never heard of gambling addiction for example? Or other addictions that require money for that matter? Or various medical conditions affecting judgment? Or people who simply find spending very tempting? etc, etc....
    Originally posted by eskbanker
    That's a fair point, and I'm sorry if I offended anyone.
    Get to 119lbs! 1/2/09: 135.6lbs 1/5/11: 145.8lbs 30/3/13 150lbs 22/2/14 137lbs 2/6/14 128lbs 29/8/14 124lbs 2/6/17 126lbs
    Save 132,000 by 31 Dec 2018! 2011: 54,342 * 2012: 62,200 * 2013: 74,127 * 2014: 84,839 * 2015: 95,207 * 2016: 109,122 * 2017: 121,733
    eBay sales - 4,559.89 Cashback - 2,309.73
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