East Dulwich (Mobile) Forum

Trust Fund For Grand child

Any one had any dealings with setting one up or know were to go to get advice.
Bob S
It is now quite tight as to whether worthwhile.

I am thinking more of gifting (7 year rule). They can then have opened for them a Junior ISA which they can only access at 18 (yes, this is young, but will a trust now extend much further?). This would probably involve a sequence of gifts each year within the ISA limit. This may be less than you are thinking of giving of course.

I have been both the administrator and beneficiary of trusts: they are a nightmare. Hideously expensive to administer and complex to run. ISA's are transparent and so far seem to be immune to policy u-turns.

For larger sums a trust might still be worthwhile but you will need a proper lawyer. The one who ran my family trust cost £450 an hour (believe me).



Edited 2 time(s). Last edit was march 16, 09:05pm by jaywalker.

We did a trust fund for 4 of the grandchildren as we had inherited some substantial stocks and shares and due to the complexity of cashing them in, we were advised to transfer them into a trust Fund which is managed by the finance fund/stockbrokers who had set up the original portfolio. Since the grandchildren cannot inherit until they are 25, the trustees have a bank account where the interest from the portfolio is transferred on a regular basis which trustees can access to pay for school trips and essentials. William Bailey solicitors drew up the Trust Fund at a very reasonable cost.
Thanks JayWalker and Pugwash.
Bob S
My father in law recently did some research in to this as he wanted to do something for my daughters. He settled on this as the best bet for the time being.

[www.nsandi.com]
Thanks Otta something to look at.
Bob S
> [www.nsandi.com]

Children's Bonds maximum holding is £3,000 per child per issue according to the Ts&Cs.
Pugwash Wrote:

We did a trust fund for 4 of the grandchildren as
we had inherited some substantial stocks and
shares and due to the complexity of cashing them
in, we were advised to transfer them into a trust
Fund which is managed by the finance
fund/stockbrokers who had set up the original
portfolio. Since the grandchildren cannot inherit
until they are 25, the trustees have a bank
account where the interest from the portfolio is
transferred on a regular basis which trustees can
access to pay for school trips and essentials.
William Bailey solicitors drew up the Trust Fund
at a very reasonable cost.

My point is that Trusts are neither simple nor invulnerable to change. The tax situation has changed (for example on what is owed on dividends). As it changes there are more emails to solicitors and accountants! The age conditions have also changed: what kind of a trust is it that means they cannot access until 25?

This from the government website for a 'bare trust':
Bare trusts
Assets in a bare trust are held in the name of a trustee. However, the beneficiary has the right to all of the capital and income of the trust at any time if they’re 18 or over (in England and Wales), or 16 or over (in Scotland). This means the assets set aside by the settlor will always go directly to the intended beneficiary.
Bare trusts are often used to pass assets to young people - the trustees look after them until the beneficiary is old enough.

Perhaps your trust closed before this, or is another kind of trust?
The decision to inherit share at 25 years was our choice, and agreed with by both our solicitor and the finance/stockbroker company. The eldest grandchild is now 22 and is slowly growing in maturity so hopefully when 25 will be 'mature'. He has indicated that he wants some of the money reinvested but we will see if this is still his idea when 25. We also sought advice from an independent accountant to check tax situation.
This doesn't sound as if it is needed for a mentally handicapped child but if it is then you need a discretionary trust and Mencap have a legal service which explains them and runs them.

You would also have to take independent legal advice.
OK, Pugwash, I'm signing off on this thread as too complex to make lay-judgements, both of legal entitlement and (I fear) of ongoing income tax liabilities.

However, I must note that the law did change and that bare trusts are now claimable at 18. There is a different type of trust where you can specify 25 (max) but only, if I understand it, if set up on death (not I think the intention of the OP). Of course I may be wrong about all this. Certainly a case for independent financial advice (and best to take that adjective in the strictest sense of the term).

There are also variable income tax liabilities that must be honoured according to the nature of the trust. And the 18-25 on-death trust has its own tax issues ... I do not find the government website unclear on the matter.



Edited 2 time(s). Last edit was march 18, 08:09pm by jaywalker.

Maybe summarizable as "take legal advice"
Thank's to all of you for your help on this request time to seek some legal advice.
Bob S
"Of course I may be wrong about all this."

Yes, you are.

A trust is just a legal structure to separate out different rights and responsibilities in relation to property. There are some formalities needed to ensure it is valid and effective in law, and some decisions to be made about what you want to achieve and how best to go about it, but unsurprisingly the more complicated the property and the objectives the greater costs are likely to be. It needn't be very expensive to get initial advice and simple trusts are simple to set up.

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