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  • FIRST POST
    • malcolmalisle
    • By malcolmalisle 12th May 18, 6:32 PM
    • 1Posts
    • 0Thanks
    malcolmalisle
    Locking it away until she is 24
    • #1
    • 12th May 18, 6:32 PM
    Locking it away until she is 24 12th May 18 at 6:32 PM
    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
Page 3
    • FB13
    • By FB13 14th May 18, 2:43 PM
    • 120 Posts
    • 21 Thanks
    FB13
    I hope posters here are not solicitors. There is some questionable law from several people.

    In case it clarifies the trust issue: the aunt could have given the 10,000 to the OP absolutely, on the understanding that she'd like it to go to the daughter at 24, but that it was the OP's own money and he had discretion to give it to the daughter at 24, spend it on himself or chuck it down a well, like any other 10,000 of his own money.

    she gave it to the OP absolutely, and the OP subsequently moved 10,000 of his own money into a bare trust account, and it has been the daughter's from that point. Either way the money is the daughter's and she is absolutely entitled to access it at 18.
    Originally posted by Malthusian
    The argument to be made by the father is that he dumped it in the daughters account for safekeeping but it isn't the daughter's funds, it's only being held in that account as a loan from him and he will formally give it to her later as a gift from him to her when she is 24. It wasn't settled into the trust by him but merely loaned to the trust. While some will say that's a far fetched way of trying to weasel out of it, the daughter will presumably not complain too much anyway when the father explains the error/intention.
    Originally posted by bowlhead99
    If the money was given by the aunt to the father outright and the father wanted it back, the father would need to rebut the presumption of advancement by presenting evidence that he didn!!!8217;t intend to make a gift to the daughter but instead intended to retain an interest in the property

    That loan argument is a non starter from the beginning.
    Last edited by FB13; 14-05-2018 at 2:45 PM.
    • aj23
    • By aj23 14th May 18, 3:07 PM
    • 396 Posts
    • 145 Thanks
    aj23
    You won't see it often, but I agree with ValiantSon. Once the daughter is 18 and the money is in an account in her name, no one can tell her what to do with it. Advise, yes. Guide, yes. Help, yes. Control, no.

    That money is hers now and in her name solely. Her parents nor Aunt can tell her what to do with it. Once you give away money, it's no longer yours, hence you can say what should be done with it.

    And in this day, she will need that 10k before she's 24.
    Last edited by aj23; 14-05-2018 at 4:40 PM.
    • Radiantsoul
    • By Radiantsoul 14th May 18, 4:54 PM
    • 1,991 Posts
    • 1,987 Thanks
    Radiantsoul
    Might be easier not to mention to your sister what your daughter does with the money.
    • bowlhead99
    • By bowlhead99 14th May 18, 5:51 PM
    • 7,820 Posts
    • 14,286 Thanks
    bowlhead99

    If the money was given by the aunt to the father outright and the father wanted it back, the father would need to rebut the presumption of advancement by presenting evidence that he didn't intend to make a gift to the daughter but instead intended to retain an interest in the property

    That loan argument is a non starter from the beginning.
    Originally posted by FB13
    In the absence of any documentation dated before the money was plopped into the account, you are right of course that the lawyers for the daughter (or for HMRC if relevant) will just say it's presumed to be a gift when the money was given by him to his daughter's account, and he doesn't have anything to prove it isn't. That's how it works and he would lose in court if challenged on it

    While you're correct, my view is simply that he's not getting challenged in court by the daughter (and I've already made comment that he may need to correct a tax position) and so really he is just looking for a reason to take the money out of the account to save elsewhere to be able to give her later.

    His excuse is that he only put it in the account by mistake because he didn't realise the implications (an error on his part) or that he put it there for safekeeping so his daughter would get the interest while he worked out what to do with it (loaning it to her). As he didn't do any paperwork he knows neither of those 'reasons' will actually pass muster when lawyers get involved.

    But, this is a matter between the family rather than going up against the full extent of the law, which only gets involved if someone feels sufficiently wronged to complain.

    Like when his daughter passes her driving test but drives him home at 32 mph in a 30 zone and opens the car door into his garage wall, he won't try to sue her or try to bring a private prosecution against her for dangerous driving. When he takes back the cash that he'd temporarily dumped into her account, with the intention to return it later, she won't sue him to get at it. She will probably think she's quite lucky to have a generous father or aunt who is going to give her some money to spend in her early twenties, and it's certainly better to be patient and a bit annoyed (which she might not even be) rather than sever the ties of familial support by saying she doesn't want those kind of parents.

    It's a rocky road to say whatever happens in family stays in family because you see some truly horrific cases of abuse that might start somewhere more harmless on the spectrum. Still, I think the dad is justified in reversing his error - his daughter will make mistakes in her lifetime she'll want forgiving for, too -and nothing serious will come of it.
    Last edited by bowlhead99; 14-05-2018 at 5:54 PM.
    • Flobberchops
    • By Flobberchops 14th May 18, 7:57 PM
    • 721 Posts
    • 523 Thanks
    Flobberchops
    This thread has been fascinating to watch unfold. 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.

    To stick my oar in, I think the original intention is moot and we have to judge the situation on the reality as it stands. Or could I claim that the money was REALLY intended for me, and the fact that it ended up in OP's control is an "administrative error"? In that case, my account number and sort code are ******* **-**-**, cheers!


    Is it out of the question to sit the daughter down and say "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..."?
    Last edited by Flobberchops; 14-05-2018 at 8:08 PM.
    I work for a UK bank, but any comments made on this forum are solely my personal opinion. Caveat Emptor!
    • bowlhead99
    • By bowlhead99 14th May 18, 8:10 PM
    • 7,820 Posts
    • 14,286 Thanks
    bowlhead99
    In that case, my account number and sort code are ******* **-**-**, cheers!
    Originally posted by Flobberchops
    I hope you realised by now that MSE forum software has some rudimentary anti fraud protection built in. So if you post your account number, sort code, bank passwords or tax ID, it automatically replaces the digits in the post that you see with *s for everyone else to see. Pretty neat.

    Unfortunately it works both ways so if you replace the details with *s yourself as you have just done, it displays the *s on your view of the forum, but then all the rest of us onlookers can see your real details!

    You had better be quick and edit your post to flick the "*"s back to real numbers so that to us, they are blanked out.

    This technology is hard to keep up with - you have to keep on your toes these days.
    • veryintrigued
    • By veryintrigued 14th May 18, 8:24 PM
    • 2,360 Posts
    • 1,780 Thanks
    veryintrigued
    Anyone else thinking why 24?
    • theoretica
    • By theoretica 14th May 18, 8:51 PM
    • 5,152 Posts
    • 6,400 Thanks
    theoretica
    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.
    Originally posted by Flobberchops
    Put the money in pensions?
    But a banker, engaged at enormous expense,
    Had the whole of their cash in his care.
    Lewis Carroll
    • chockydavid1983
    • By chockydavid1983 14th May 18, 8:54 PM
    • 579 Posts
    • 351 Thanks
    chockydavid1983
    Anyone else thinking why 24?
    Originally posted by veryintrigued
    My thoughts exactly- seems rather arbitrary
    • ChesterDog
    • By ChesterDog 14th May 18, 9:16 PM
    • 881 Posts
    • 1,642 Thanks
    ChesterDog
    Funny thing is that my father's will - of which I am executor -stipulated age 24 for both of his granddaughters (my nieces) to receive their inheritance.
    I am one of the Dogs of the Index.
    • cloud_dog
    • By cloud_dog 14th May 18, 9:30 PM
    • 3,685 Posts
    • 2,185 Thanks
    cloud_dog
    Is there any reason not to place the monies in to a 5 year fixed deal prior to 18. Money still belongs to the child but is not accessible until 22. Problem deferred for a while.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
    • Malthusian
    • By Malthusian 15th May 18, 12:40 AM
    • 4,065 Posts
    • 6,371 Thanks
    Malthusian
    Is there any reason not to place the monies in to a 5 year fixed deal prior to 18.
    Originally posted by cloud_dog
    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.

    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.
    by Flobberchops
    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
    • By cloud_dog 15th May 18, 10:19 AM
    • 3,685 Posts
    • 2,185 Thanks
    cloud_dog
    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.
    Originally posted by Malthusian
    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

    Sometimes.... I am like a dog with a bone
    • IanManc
    • By IanManc 15th May 18, 11:59 AM
    • 534 Posts
    • 869 Thanks
    IanManc
    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.
    Originally posted by cloud_dog
    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
    • By cloud_dog 15th May 18, 1:00 PM
    • 3,685 Posts
    • 2,185 Thanks
    cloud_dog
    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

    Sometimes.... I am like a dog with a bone
    • Malthusian
    • By Malthusian 15th May 18, 2:20 PM
    • 4,065 Posts
    • 6,371 Thanks
    Malthusian
    So the act of placing the money in to the bare trust has, in essence, negated any other sort of trust instructions.
    Originally posted by cloud_dog

    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
    • By cloud_dog 15th May 18, 2:41 PM
    • 3,685 Posts
    • 2,185 Thanks
    cloud_dog
    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.
    Originally posted by Malthusian
    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

    Sometimes.... I am like a dog with a bone
    • Malthusian
    • By Malthusian 15th May 18, 3:39 PM
    • 4,065 Posts
    • 6,371 Thanks
    Malthusian
    Interesting. I wonder if this may cause a lot of bequeaths to fall fowl of the 'law'?
    Originally posted by cloud_dog
    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
    • By cloud_dog 15th May 18, 4:52 PM
    • 3,685 Posts
    • 2,185 Thanks
    cloud_dog
    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

    Sometimes.... I am like a dog with a bone
    • xylophone
    • By xylophone 15th May 18, 5:22 PM
    • 25,370 Posts
    • 14,966 Thanks
    xylophone
    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?
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