Money in trust for kids


M

Mike Hibbert

Hello All,

Can I ask a question about saving money for kids futures please?

My cousin (who has much more will power than me!) has been saving up her
family allowance for her 2 children. She wants to put it somewhere safe
for when they are 18. She also wants it to be in their names so that it
is safeguarded.

Currrently she receives no state benefits, but as circumstances change
(she's about to become a newly single parent) there may come a time
where she needs to claim, and wouldn't want to have use the childrens
money, so it needs to be in their names and protected from the DSS if
she ever needs to claim.

She went to the Nationwide, but the guy there was more concerned with
the standard things like selling life assurance etc, and had nothing to
offer. Has anyone any idea what the best idea is?

We do understand the idea that some people could stick hugh wads of cash
in the bank for the "kids", while claiming loads of benefits, and then
having a holiday on the "kids" money (along with widescreen tv etc), but
in this case it is a mum wanting to give her kids a good start in life.

I wondered about some kind of regular "trust fund" in the kids name, but
have no idea how secure it is.

any ideas?
 
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N

nambucca

Mike Hibbert said:
Hello All,

Can I ask a question about saving money for kids futures please?

My cousin (who has much more will power than me!) has been saving up her
family allowance for her 2 children. She wants to put it somewhere safe
for when they are 18. She also wants it to be in their names so that it
is safeguarded.

Currrently she receives no state benefits, but as circumstances change
(she's about to become a newly single parent) there may come a time
where she needs to claim, and wouldn't want to have use the childrens
money, so it needs to be in their names and protected from the DSS if
she ever needs to claim.

She went to the Nationwide, but the guy there was more concerned with
the standard things like selling life assurance etc, and had nothing to
offer. Has anyone any idea what the best idea is?

We do understand the idea that some people could stick hugh wads of cash
in the bank for the "kids", while claiming loads of benefits, and then
having a holiday on the "kids" money (along with widescreen tv etc), but
in this case it is a mum wanting to give her kids a good start in life.

I wondered about some kind of regular "trust fund" in the kids name, but
have no idea how secure it is.

any ideas?

Since any interest over £100 a year on a kids account with money provided by
the parents lands up being taxed and regarded as parents liability she will
be on a sticky wicket

Actually i thought that Nationwide was the one Bsoc whose kids account pays
a decent interest rate unlike Birmingham Midshires who used to be good but
is now awful

If she is going to be reliant on state benefits she needs to ensure she has
no savings attributed to her

Get a Granparent to open a kids trust account at a B Soc and move the money
into that fast
 
J

john boyle

Since any interest over £100 a year on a kids account with money provided by
the parents lands up being taxed and regarded as parents liability she will
be on a sticky wicket

Actually i thought that Nationwide was the one Bsoc whose kids account pays
a decent interest rate unlike Birmingham Midshires who used to be good but
is now awful

If she is going to be reliant on state benefits she needs to ensure she has
no savings attributed to her

Get a Granparent to open a kids trust account at a B Soc and move the money
into that fast
The child allowance is paid to the parents. It is the parents money. It
is intended to assist with the parents' costs of bringing up the child.

If the parent decides to put an amount similar to the Child Allowance
into a savings account then this is her choice and she must realise that
by doing so she is deliberately depriving herself of capital that she
may need in the future. I dont see why the state should have to pay when
she has deliberately deprived herself of dosh which she might need for a
'rainy day'.
 
M

Martin Davies

Mike Hibbert said:
Hello All,

Can I ask a question about saving money for kids futures please?

My cousin (who has much more will power than me!) has been saving up her
family allowance for her 2 children. She wants to put it somewhere safe
for when they are 18. She also wants it to be in their names so that it
is safeguarded.

Currrently she receives no state benefits, but as circumstances change
(she's about to become a newly single parent) there may come a time
where she needs to claim, and wouldn't want to have use the childrens
money, so it needs to be in their names and protected from the DSS if
she ever needs to claim.

She went to the Nationwide, but the guy there was more concerned with
the standard things like selling life assurance etc, and had nothing to
offer. Has anyone any idea what the best idea is?

We do understand the idea that some people could stick hugh wads of cash
in the bank for the "kids", while claiming loads of benefits, and then
having a holiday on the "kids" money (along with widescreen tv etc), but
in this case it is a mum wanting to give her kids a good start in life.

I wondered about some kind of regular "trust fund" in the kids name, but
have no idea how secure it is.

any ideas
Might be worth seeing an independant financial advisor. The various banks
and building societies can usually only sell you their own products.

As I recall, child benefit is classed as income by the benefits agency and
does affect benefit received. So while you can put money away now, when you
claim benefits then you will be making yourself out of pocket by a fair bit
each week.
The money is there to be a help in raising the kids. Nice that someone can
afford to save it for them, but thats not what its for.

Has the new scheme of savings for kids mentioned a budget or two ago
actually started yet?

Martin <><
 
D

Dee

Mike Hibbert said:
Hello All,

Can I ask a question about saving money for kids futures please?

My cousin (who has much more will power than me!) has been saving up her
family allowance for her 2 children. She wants to put it somewhere safe
for when they are 18. She also wants it to be in their names so that it is
safeguarded.

Currrently she receives no state benefits, but as circumstances change
(she's about to become a newly single parent) there may come a time where
she needs to claim, and wouldn't want to have use the childrens money, so
it needs to be in their names and protected from the DSS if she ever needs
to claim.

She went to the Nationwide, but the guy there was more concerned with the
standard things like selling life assurance etc, and had nothing to offer.
Has anyone any idea what the best idea is?

We do understand the idea that some people could stick hugh wads of cash
in the bank for the "kids", while claiming loads of benefits, and then
having a holiday on the "kids" money (along with widescreen tv etc), but
in this case it is a mum wanting to give her kids a good start in life.

I wondered about some kind of regular "trust fund" in the kids name, but
have no idea how secure it is.

any ideas?
From what I can remember when my mother set the same thing up for one of my
kids if you put the account in the child's name they have automatic right to
funds when they reach 16 not 18.

Dee
 
S

sufaud

If the parent decides to put an amount similar to the Child Allowance
into a savings account then this is her choice and she must realise that
by doing so she is deliberately depriving herself of capital that she
may need in the future. I dont see why the state should have to pay when
she has deliberately deprived herself of dosh which she might need for a
'rainy day'.
That is, pardon the expression, BS. It has no basis in insolvency law.

At most one is talking about a couple of thousand pounds a year, below the
radar for anything. One is not required to abstain from giving gifts out of
income because, at some future, unpredictable time, one might just possibly
become insolvent.

The test for a fraudulent conveyance is ability to meet one's debts NOW as
they come due. Nothing said earlier suggests that is not the case, and that
a future ex-husband will renege on his child support responsibility AND that
the CSA will be unable to enforce it.

Etc. etc. etc.
 
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M

Mike Hibbert

john said:
The child allowance is paid to the parents. It is the parents money. It
is intended to assist with the parents' costs of bringing up the child.

If the parent decides to put an amount similar to the Child Allowance
into a savings account then this is her choice and she must realise that
by doing so she is deliberately depriving herself of capital that she
may need in the future. I dont see why the state should have to pay when
she has deliberately deprived herself of dosh which she might need for a
'rainy day'.
Don't be an arse, I said that this wasn't the case. She hasn't got much
money, and her kids future is the top priority. Don't be deliberately
obtuse, if you have nothing interesting or useful to add, then just stay
quiet.
 
M

Martin Davies

Mike Hibbert said:
Don't be an arse, I said that this wasn't the case. She hasn't got much
money, and her kids future is the top priority. Don't be deliberately
obtuse, if you have nothing interesting or useful to add, then just stay
quiet.
Fine if she wants to save for the kids.
It will impact her benefit money, should she get it. Her kids future may be
top priority now, but if income isn't big enough then it needs to pay for
the kids now.

Fine if she can avoid temptation and give the kids a few grand when they are
older. Trust fund comes in handy.
Just not always possible to keep it, or to keep adding to it.

Martin <><
 
S

Steve Frazer

sufaud said:
That is, pardon the expression, BS. It has no basis in insolvency law.
Where did insolvency law come into this? The poster just wanted to know how
his friend could pretend she hadn't got savings so she might not lose
benefits.
At most one is talking about a couple of thousand pounds a year, below the
radar for anything. One is not required to abstain from giving gifts out of
income because, at some future, unpredictable time, one might just possibly
become insolvent.
You seem to have become all critical over an assumption you made. When it
comes to claiming means tested benefits savings of £3000+ can reduce
benefits. If she has saved £2K per year and the 'children' have amassed a
large sum then it's way above the 'benefits radar' and she may not be
entitled to any benefits at all.
The test for a fraudulent conveyance is ability to meet one's debts NOW as
they come due. Nothing said earlier suggests that is not the case, and that
a future ex-husband will renege on his child support responsibility AND that
the CSA will be unable to enforce it.

Etc. etc. etc.
More and more assumptions, etc, etc, etc ;-)
--


Steve Frazer

http://homepage.ntlworld.com/steve_frazer/index.html
 
S

Steve Frazer

Except that it's not actually 'their' money, but her money that she has
allocated to them for the future.

This poster seems to think that she just wants to avoid using her savings.
If this poster is right and that is the intention then what you are asking
for is advice to defraud the benefits system. I don't believe that this is
the appropriate place to ask for advice on how to commit fraud. Some of us
might have no choice but to take action. Some others might feel that
encouraging you to tell her how to defraud us out of our money (assuming
we're tax payers) is not cricket.
Don't be an arse, I said that this wasn't the case. She hasn't got much
money, and her kids future is the top priority. Don't be deliberately
obtuse, if you have nothing interesting or useful to add, then just stay
quiet.
He wasn't being an arse. She has got money, but has earmarked it to give to
her children in the future. Unfortunately life doesn't always go to plan.
I recently had to fork out £1200, what I didn't do was look at ways to
defraud every other tax payer, I paid up. I'm not arsey but consider what
would happen if everyone tried to claim that really the £10,000 they had
saved up was £5,000 each for Johnny and Jeffrey when they turn 18.

BTW even if the money is in their names it counts as her savings over a
certain level. The system is unfair and often bizarre :-(

This takes you to a comprehensive benefit advice website.
http://www.adviceguide.org.uk/nw/index/life/benefits.htm
--


Steve Frazer

http://homepage.ntlworld.com/steve_frazer/index.html
 
J

Jane Tweedynn

If the parent decides to put an amount similar to the Child Allowance
into a savings account then this is her choice and she must realise that
by doing so she is deliberately depriving herself of capital that she may
need in the future. I dont see why the state should have to pay when she
has deliberately deprived herself of dosh which she might need for a
'rainy day'.
--
Unless of course the child was born after August 2002 and the money goes
into the CTF.
 
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M

Martin Davies

john boyle said:
But that wouldnt be the 'child benefit' referred to?
No, but a parent can pay money into it. Using any available funds, including
child benefit.

Martin <><
 
R

robertmlaws

You could open a stakeholder pension in the child's name. Then they'd
get the extra bit )(quasi tax relief) put in by the government.
Robert
 
M

Martin Davies

You could open a stakeholder pension in the child's name. Then they'd
get the extra bit )(quasi tax relief) put in by the government.
Robert
Its a good idea. But can't be touched at age 18.

Still, an early start on pension savings has a larger impact than trying to
start later in life.

Martin <><
 
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J

John-Smith

Martin Davies said:
Its a good idea. But can't be touched at age 18.

Still, an early start on pension savings has a larger impact than trying to
start later in life.
A few thoughts...

To get around the £100 annual interest bit, make sure any investments
come from someone more distant than the parent. So route the money via
a grandparent, for example, without making it really obvious.

I doubt that putting money into a pension fund for the child is a good
use of cash for a parent who doesn't have a whole lot spare and may
need it sooner. The child won't be able to touch it for some 50 years,
and by then the whole state pension system will be different - very
possibly the state pension will be rolled up into social security and
thus in effect means tested, so having built up a large *state*
pension pot may be a complete waste of money.

I have looked at trusts for kids and AFAIK there is no way to do it
(without resorting to overseas-based trusts) so that the child's
personal CGT and income tax allowances can be used *and* the parent
can control the money past age 18. For example, you may not want the
child to get the money at 18, if they turn out to be absolute
monsters, on drugs etc. An A&M trust can delay the handover till age
25 but with any of these trusts one cannot take the money back out.
There is also the early death of the child to consider...

The simplest way may well be to just give the money, in an untraceable
manner of course (cash), to a trusted person (e.g. a grandparent) to
invest in an ISA or something like that, on behalf of the child.
 

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