Discretionary Trusts for my kids - where to start ?

[Planetmonster]

GPs willing to put some money in for the kids for when they reach 25.

I think this is called a Discretionary Trust. I want the money in index tracker funds so it doesn't lose money through inflation. What do I need to set one up? So far I think :

Solicitor to set up the Discretionary Trust
Hargraves and Lansdown accounts for the fund tracker in the name of the fund.
Register with HMRC.
Maybe accounts yearly.

Does anyone do all this as a one shop stop, seems PAINFUL.

Anything else I should think of?

Terrible advice. Over a long enough period of time, equity index trackers tend to outperform gilts big time. Plus there's the issue of how to reinvest the gilt coupons.

Discretionary trusts tend to be not very tax efficient and come with huge admin costs.

Would the grandparents give the money in a Junior ISA? The allowance is £9k each so they'd have to do it over 6 years.

Would they be open to giving the money to the parents and let the parents manage it in their name? it would be much more tax efficient than a discretionary trust

Otherwise, if a discretionary trust is the one and only option, you'd have to get quotes from professionals, and you should provide a comparison to the GPs, eg tell them:

let's suppose that we invest the money in an index tracker that yields 5%. If the money is in a junior ISA or in an ISA in the parents' name, the return will be 5%. In a discretionary trust, it will be 5% minus X. Are you Ok with that?

Ultimately, their money their choice, but at least it should be an informed choice

Remember that you get a £3k cgt allowance every year so you can use that by realising gains as you go.

Just thought I'd pop back to this thread to let you know that Fidelity offer a GIA for trustees. They also have there own DIY templates for setting up a trust for the account yourself.

adviserservices.fidelity.co.uk/secure/help-support/products/investment-account-help/about-our-investment-account/trust-pension-charity/

This is a useful thread, thank you.

Just thought I'd add inheritance tax into the mix, in case it's of use to others who like me are grappling with this situation. As the OP probably knows, if the donors of the gift (ie the grandparents in this case) die within 7 years of making the gift, IHT will be due on it, although the nil-rate allowance is applied to gifts first.