Investing for your kids, your name or theirs?

[Blackrock1]

My kids have various amounts on deposit with BOI in their own name, its monies gifted within the annual threshold from grandparents and childrens allowance lodged.

obviously its earning nothing there and we had though about putting it in a fund with zurich or someone but if we put it in their name they could theoretically withdraw the money at 18 and blow it. Ideally id like to have it in an account that we as parents could direct (but not withdraw from) and maybe restrict their access until they are a little older,

does anything like that exist? the other worry is if it goes into an account in my name and then back to them when they are older it uses some of their inheritance threshold.

 

[Steven Barrett]

Once they are 18 the bare trust is over.

My experience with things like this is that children do not spend the money. It is in an account that is out of sight and out of mind and their children don't bother with it, it's just something that their parents have set up for the future.


Steven
www.bluewaterfp.ie

 

[Leper]

Back in the day my parents bought Savings Certificates for me that were due to bear fruit around 1970. They didn't and what I got was a pretty minimal return (a loss with inflation at the time).

The parents of my best friend at the same time bought a site in the country for their offspring. They really "clicked" and got a terrific return when they sold the site.

I don't know if this is relevant with Blackrock1's query, but if I were him I'd be looking around.

 

[RedOnion]

Once they are 18 the bare trust is over.

Is that always the case, if set up appropriately?

I know when I set mine up, I had the option to remove the clause. However I've been advised to get an indemnity signed by the children when they turn 18 so that we, as trustees, are not liable for losses made on the investment.

 

[Steven Barrett]

Is that always the case, if set up appropriately?

I know when I set mine up, I had the option to remove the clause. However I've been advised to get an indemnity signed by the children when they turn 18 so that we, as trustees, are not liable for losses made on the investment.

This is correct. Once they hit 18, the trustees will be authorised to hold legal title to the trust fund for the benefit of the child but do not have any further powers in relation to the management of the trust fund. If you do continue to manage the fund on behalf of your child, a new standalone contract has to be drawn up between the parties.

But as I said originally, the kids I have done this for have just seen it as something there parents are doing for them for the future and haven't bothered with it. It's very different than having the money in their bank account.

Steven
www.bluewaterfp.ie

 

[Live Well]

Hi SBarrett,

Is it possible or would it be worthwhile to take this approach with small amounts of money, €280, a month?

Thank you.

 

[Steven Barrett]

Hi SBarrett,

Is it possible or would it be worthwhile to take this approach with small amounts of money, €280, a month?

Thank you.

yes, of course. Many parents set up regular savers for their kids (2 in your case, I'm guessing ). If you are doing it under trust structure, you need two policies though.

If you are intending in using it to pay for education in the future, there is no need to set up a trust.

The purpose of the trust structure is that you can put in up to €3,000 a year without it impacting on your children's inheritance. The money is there for your children's benefit so the end value isn't seen as the gift, it is the amount that goes in that is assessed.

Steven
www.bluewaterfp.ie

 

[Pinoy adventure]

Steven do you set up trust funds ?