As trustees, What to do with approx 12k trust fund

[lessthanBeau]

We have approx 12k to look after for our niece from my late brother's estate, she cant have the money until 21, shes 16 now, what's the best option for us?

Look at the trust setup to see if there are limitations to what you can do.
I would look at a Junior ISA, Stocks & Shares version with a moderately aversive fund selection of well diversified passive index funds. You want to make sure that the JISA is a suitable investment wrapper based on the trust rules, you also want to look at costs.

You also want to teach them about money. You don't want them to come into this money when they are 21 and have no clue what to do with it, you want them to have a good knowledge of personal finance and have a plan for what that money will be used for when they get access to it.

JISA won't work so scrap that idea - has a yearly limit plus pays out at age 18.

Broad ‘Investment Trust’ based fund and then transfer to her when she is ready at 21 or over. If the Will stipulated age 21 an express trust has arisen and it needs to be registered with HMRC under their Trust Registration Service and you will need a Government Gateway account to do that. At age 21 you will hold the investment on ‘bare trust’ and she can ask for it to be sold at any time then.