Need to set up a child's trust account for death benefit pay out

[FollowTheRain]

I hope someone can advise, because I'm lost. My children's father (ex dh) died recently, his employer are planning to pay out a death in service lump sum to the children to be held in trust until they are 21. Their dad had no family and I since discovered he put me down as next of kin at work. I have dealt with the (insolvent)estate, funeral etc and its been absolutely awful all round. They have asked me to open a child's trust account and that I need to select another person to be joint trustees of this account until the children reach 21. The company are drawing up trust deeds and will provide a 'declaration of trust'

dc are 10 and 16 (eldest disabled) I've looked at a few banks and none seem to offer accounts that lock money away until 21, also one child will reach 21 long before the other. I have no idea what I'm doing, can anyone offer any advice. I'm also in Scotland.

There was a similar thread not long ago. I'll see if I can find it for you. The OP was asking if the money could legitimately be used to pay for driving lessons.

The basic advice was you don't need a Trust Fund - these are primarily for high worth individuals/families - you can just put the money in a regular savings account/ISA/Premium Bonds in your DC's name.

As a Trustee, you are responsible for the investment so, as an example, if you put it in a risky crypto currency and lost the lot, your DC could potentially sue you for their loss.

Is there anyone on your late exDH's side who could act as a Trustee with you? You ideally want someone on the same page regarding what the money can/should be used for?

Is there anything for you, as following his death he will no longer be able to pay child maintenance?

Thank you for replying, I really appreciate it.

From the letter they sent me it doesn’t seem like I’m been given the option of the type of account that is opened. It says the current trustees (the company) require me to open a child trust account in the name of 2 new trustees to be held until the children reach 21.
no, there is nobody left on his side unfortunately only his mum is still alive they were no contact, she wasn’t interested when he died and doesn’t know the children.

The company have said that as maintenance was paid by private arrangement and not court order, I’m excluded as a beneficiary. Which is crazy, absolutely not what he would have wanted 😔

You should still be able to draw down reasonable expenses- pocket money, clubs, activities etc

I’ve just spoken to them again about this and they are saying I can’t. Apparently I can’t use it for their upbringing at all and its to be locked away until 21

Arghhhhhhhhhh

It will be discretionary probably on the part of your husbands employer.

If you are appointed as trustee you will have lots of powers so think carefully about who you put forward as joint trustee. Trustees can invest - it doesnt hve to just sit in a low interest account.

I would work on getting the money paid out from the life company and then work out what court orders for example you need to obtain after the event. It wont be as clear cut as they say.

It’s madness, as if I haven’t been through enough without worrying about this 😔

Ps trustee can charge the trust for their reasonable time and expenses.

You need to ask for a copy of the scheme.