Recieving and investing a minor child inheritance

[ImpPeril]

Our two DC are due to inherit a couple of thousand pounds each. We haven't heard anything from the solicitor directly but understand there is a request it will be held in trust until they are 18 (currently both under 5).

Has anyone been through this before who is able to offer practical advice? Who were the trustees and how was this set up? Do the trustees have any access to this money on their behalf or only the responsibility of managing it in their interests?

Or is there anyone who understands some of the different saving or investment options there might be available? Currently they don't even have their own savings accounts (as the ones with the best rates seem to be for older children only?) but if it is possible we hope to be able to add to this pot ourselves over the next few years.

The only thing we want to stay away from are premium bonds as we wouldn't be willing to risk causing a large disparity between them. Thank you.

I think a long term child ISA would be best option? A few thousand is a small amount of money in grand scheme of things. Definitely don't do premium bonds, with only a few thousand they wouldn't win very often - savings account is much better!

I would agree with the pp, unless the trust has already been set up by the deceased there would be costs involved which may not be worth it for a couple of thousand pounds.
you would also need to make decisions where to invest money and the risks that come with that.
id put it in an isa

Is setting up the trust not automatic/easy then? Unfortunately I don't know whether we'll get a choice about it or not.

I couldn't immediately see any good Junior IsA rates available ( with online access) to under 5's which is what made me wonder if there were other options but it sounds like that will be the best place to start.

Do you know whether we can change how it's invested once the children have been given it (if it's in trust)?

I'd see if you can start a SIPP for them, the money will be locked away until they retire and you and eventually they can add to it. They sooner they start the better with compound interest

An ISA is a trust, so are non-ISA children's savings accounts - parents are the trustees. For an ISA parents can't take money out and they automatically go to the child at 18 so should fulfil yhe wishes of thr will. A will which gifts minors directly automatically creates the legal basis of a bare trust anyway. The solicitor should be able to advise you but it's likely you'll just be sent the money and you can invest it as you want.

Thank you. That's very helpful and makes it sound a little less daunting. I think we will wait until we hear from the solicitor and hope we don't have to proceed in too much of a rush from there.

Don’t do this. Unless there’s something in the will that specifies otherwise, they’ll be entitled to the money when they reach the age of majority (assuming England / Wales) and obviously you can’t access a SIPP at that age,

Do the trustees have any access to this money on their behalf

Nope (and rightly so). Not all are as honest as you would be.

Definitely ask a financial advisor for the best options.

Thank you. This makes sense, although does this mean that once the money is in a savings account, that this account can't be changed even if that rate becomes uncompetitive? Or has to be in an account that we can't add to? We don't have a financial advisor but if this will be the best thing then we will look into this.

I understand it that once it’s invested only the named account holder can change or move it.
But that would be one for a solicitor.