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Original poster

WWYD premium bonds

196 replies

SmileAndNod · 02/12/2021 15:43

I have 3 DCs. They were all given premium bonds when they were born by grandparents which I hold in trust until they're 18.

One of them has won quite a bit of money (to us). Not a life changing amount, but it would probably be a good heft of a deposit on a house.

Do we split into 3, and do the same if the other 2 ever won anything? And where do we put it? A lovely problem to have but I'm ever so slightly in shock.

OP posts:
ElfontheShelfisLookingatYou · 05/12/2021 11:40

If the prizes go direct to the parents if they not reinvested then what's the fuss?
Take them and properly invest in an isa for all.
They will all get a great sum to play with

Ana27 · 05/12/2021 11:44

The terms and conditions of NS and I or whether 'premium bond are a trust' are red herrings here. Pretty much anything can be held in a trust. Cash, bonds, wine and premium bonds etc are 'not a trust' but they can all be held in a trust. Whenever one person holds something in their name for another person who is the beneficial owner, then they will be doing so on trust, even if there is no express trust document. A parent who is doing that is also covered by the provision I put above. That means that a parent who holds the child's property in their own name, or who manages property in the child's name, will be doing so as a fiduciary for the child and must act in the individual child's best interests.

NS and I's terms and conditions don't change any of this all they do is govern the relationship between NS and I and the parent and the bond holder. They don't - and couldn't - affect the parent's duties to the child or the beneficial ownership. A good analogy would be signatories to a charity's bank account. The bank's terms and conditions may well allow the signatories to withdraw money but that doesn't mean that the money is then the signatories' for them to do whatever they want to with. They would still be holding that money for the charity and the charity could recover the money (and there may be criminal offences) if the signatories used it for their own purposes. The PP who contacted NS and I because the child's mother had withdrawn the child's money presumably received the right answer as far as NS and I are concerned- i.e. they don't have any duty to stop her withdrawing the money - but that doesn't mean she hasn't breached her duty to the child.

Of course anyone faced with these decisions in real life should take their own legal advice if they want to do anything other than keep the money for the child. No-one should rely on randoms on the internet but please could people refrain from declaring what they think the law is if they don't actually know.

Ana27 · 05/12/2021 11:45

@ElfontheShelfisLookingatYou

If the prizes go direct to the parents if they not reinvested then what's the fuss? Take them and properly invest in an isa for all. They will all get a great sum to play with
Elf did you read the thread including my post above yours? How do you think your view is consistent with the legal provision I posted?
fakereview · 05/12/2021 13:37

@Bunnycat101

And yes prize money for children’s premium bonds go direct to the parents if not reinvested.
My son's wasn't, the cheques for the prizes were sent to him, in his name. Does it depend on the value of the prize (he never won a big one).
ElfontheShelfisLookingatYou · 05/12/2021 14:00

No I hadn't seen that but acting in the child's interests could also be argued to mean, one child isn't set apart from the others by being able to fund a home, uni with no debt, traveling abroad, lessons for driving a new car etc whilst the siblings can't.
To act in the child's best interests would be to spilt the money and properly invest the rest so all of them still get a very large sum of money at 18. More than if any of their money including the winner is left in pb

I guess one point I'm making is that invested properly the child could end up with the same amount if winnings now, along with the siblings.

But left in pb its unlikely child will win again it won't really grow at most 1% and its unlikely the other dc will even get 1%.

Investing for them all doesn't mean the winner looses much and may gain as well.

That's what I would argue anyway.
That doing something for me the child may not leave them with less in the long run but also benefit their relations with their siblings.

KeyboardWorriers · 05/12/2021 14:06

@ana27 I echo everything you said. I appreciate people don't like how trusts law is structured but advising op on what to do if you aren't a trusts specialist is unwise in this instance. Op needs proper real life legal advice, because trusts law doesn't always align with what someone on Mumsnet thinks is the right thing to do.

KeyboardWorriers · 05/12/2021 14:07

@ElfontheShelfisLookingatYou it's quite unlikely that would be the interpretation given in law. It would be too open to abuse if "best interests" could be interpreted so broadly for money held in trust.

Stiffcondomhat · 05/12/2021 14:48

I was going to say the same @ElfontheShelfisLookingatYou

If OP is still reading I would seek advice from premium bonds themselves who will know the current legal position and will have most likely dealt with this situation many times.

Kite22 · 05/12/2021 15:39

And frankly, if I was the child who found out that I'd won a significant sum, and my parents had chosen to give 2/3 of it away, I'd be livid and it would destroy my future relationship with my parents.

I think that says more about you and your attitude to your family, rather than what is the right thing for the OP to do.

However, it is now resolved - or should be.
The winner has told the parent they want any winning equally split with their siblings, so decision making over.

Ana27 · 05/12/2021 16:28

@Kite22

And frankly, if I was the child who found out that I'd won a significant sum, and my parents had chosen to give 2/3 of it away, I'd be livid and it would destroy my future relationship with my parents.

I think that says more about you and your attitude to your family, rather than what is the right thing for the OP to do.

However, it is now resolved - or should be.
The winner has told the parent they want any winning equally split with their siblings, so decision making over.

No it's resolved because the OP has (very sensibly) decided to invest it all for the child and then to let them make that decision when they are old enough.

She says Have spoken hypothetically to the children and the one in question said without hesitation they'd share it with the family. However we're re investing to max out their account until we can find somewhere else to put the money. and for now, it's being re invested in their name for them to do as they decide.

fakereview · 05/12/2021 16:35

However, it is now resolved - or should be. The winner has told the parent they want any winning equally split with their siblings, so decision making over

Hmm I think the winner would feel duty bound to say that. When they are trying to get on the housing ladder in a few years' time they'll be on MN saying "I'd have enough money if my parents hadn't encouraged forced me to give 2/3 of it away to my siblings".

Anyway I am glad the money is being invested in the winner's name.

fakereview · 05/12/2021 16:36

No I hadn't seen that but acting in the child's interests could also be argued to mean, one child isn't set apart from the others by being able to fund a home, uni with no debt, traveling abroad, lessons for driving a new car etc whilst the siblings can't

Definitely not. Siblings are not an extension of each other. To act in the best interests of the child is to act in the best interests of that child.

Iamanicepersonreally · 05/12/2021 16:42

It's not your money and you don't have the right to decide to split it. The money belongs to the holder of the winning bond

Ihopeyourcakeisshit · 05/12/2021 17:13

@Iamanicepersonreally

It's not your money and you don't have the right to decide to split it. The money belongs to the holder of the winning bond
Oh right then, that's not been said before in the 7 previous pages .
Frenchfancy · 05/12/2021 17:37

I would split the win equally. As a pp said close down the accounts and open up new ones. Put the winnings into 3 junior ISAs.

Actually I would put all the money into junior ISAs to prevent this ever happening again.

Iamanicepersonreally · 06/12/2021 18:34

@Ihopeyourcakeisshit

Was there really any need for that or are you just in a bad mood today?

imnotacelebritygetmeoutofhere · 05/01/2022 17:58

OP, I don't know whether you are still reading the comments on this thread, I can see it's a month old - I was just searching for threads on premium bonds and came across it. I wanted to share my similar experience with you in case it helps.
When I was aged mid-teens I also won a sizable sum of money, sounds similar to the amount you have. I was heavily encouraged/steered towards sharing it between myself and two siblings for all of our future benefit. We were all in our teens and living at home. Not knowing any better and being the sort to go along with what my parents told me was the kind thing to do, the money was split three ways. Both siblings very excited and appreciative of this.
Less than a decade later when we were all in our early 20s, one sibling won a very sizable amount on the lottery. Not enough to never work, but enough to buy a nice house. They wanted to buy a house so that's what they did. They bought the house and carried on working but living mortgage free. They did not share any of the money. (Yes, selfish @r3e)
If I'd made a decision as a young adult, I'd have given some money to my siblings but kept the largest share myself. It would have paid for my university instead of leaving me in debt, or it would have been a deposit for a house. As it was, it took me another 15 years to be able to buy a house. I'm still really bitter about this experience.
You might have three kind, considerate kids now, but you don't know what's in their future. Let the one who won the money make the decision for themself when they are old enough to consider the options and the implications.

Newyearoldyou · 05/01/2022 18:16

Was it enough to invest because op could invest the money and give all three a sizable chunk

Bunnycat101 · 05/01/2022 18:49

If children weren’t told about it would they ever know as adults if the premium bonds were cashed in and reinvested more equally? They would presumably have more than the initial will allocation.

User48751490 · 05/01/2022 19:22

@mrsm43s

I think everyone seems to be missing the point that it's not OPs money to give away.

When you hold something in trust for a minor, you have responsibilities to make decisions to benefit the child involved. Just that child. Not what would be best for their siblings. Not what you think would be best for the family. Not what their grandparents would want. Not what some random on MN thinks is best.

It would be very hard to legally defend giving 2/3 of a large sum of money away as being in the best interests of the child who won the money. That is not your decision to make. They can choose to share it when they are 18, if they wish.

I have four DC and as much as I would want to make it fair, you are completely correct. It's the winning child's money. No one can dispute it.
Lea1437 · 05/01/2022 19:53

I would split it. It is in the child's best interest in terms of their relationship with their siblings long term and just the right thing to do in my opinion. Congratulations whatever you decide Smile

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