Inheritance and benefits

[123andaway]

My 3 children have been left some money by their later greatgrandmother. We're not sure of the exact amount yet but it's looking to be between 2-4k each.

It was greatgrandmothers wish that the money be looked after for the children until they are adults (the eldest is now 10), and then used by them for a car/university/house etc. She has not however put this in her will, she has simply left it to the children.

My plan is to open accounts for the children and keep the money in trust for them until they are at least 18. This would however involve my name being on the accounts, even through the accounts would be for the children.

Does anyone know where I stand with regard to my benefits (IS and CTC). Do I need to let them know, will I be penalised?

i don't think it should be an issue as it isn't technically your money

Your children will have their own tax allowances so make sure that the account is their name and that it is registered to receive interest tax free.

It might be worth thinking about getting financial advice about the inheritance as you have at least 7-8 years potential growth to consider and savings rates are very poor at the mo. Maybe a child trust fund?

You do need to let them know as it can be seen as non-disclosure if you dont inform them.

Children are allowed to have some savings without it affecting benefits so you may be ok anyway. If the money is not put in trust by the relative but simply left to the children then it will not be classed as being in trust.