Children's Trusts

[cassa333]

My children have a some money due in a will and it has to go into trust until they are 21 (they are 6 now).

Does anyone have any recomendations on safe trusts that pay a reasonable rate of interest but won't loose anything?

Thanks

[themas]

The will should have resulted in the trust being set up, & the trustees should have been named in the will. It is their duty to look after the money. If they do not have sufficient knowledge to be confident they can do this themselves, they should obtain professional advice from an Independent Financial Adviser.

[cassa333]

Yes quite.

But the question remains what is the best safest option at the moment?

[themas]

You say you don't want to lose anything. If you mean that you want to have 100% guarantee that - in 15 years time - you can take out at least £100 for each £100 you put in now, then the only way I know of doing this is to use building society or bank savings accounts. BUT 15 years is a long time & the value of each £100 you take out at the end of it will be much less than its value now, because of inflation. And the interest is most unlikely to bring in enough to cover the effects of inflation.

This is why it is generally recommended that equity investments of some kind are used for any long term savings - on the basis that they outperform cash savings over a long period.

The trustees really must take professional advice on this, otherwise they could be open to claims by the beneficiaries that they had failed in their fiduciary duty to them.

[dzug2]

If it's a substantial sum you are legally obliged under the Trustee Investment Acts to take professional advice on how to invest it. Asking here will not satisfy the law.

If you get it wrong the beneficiaries can sue you. If you've taken proper advice that's your defence.

(Unless the will directs an investment strategy)

[cassa333]

I am not the trustee. My children are the beneficeries so all I realy want is a bit of as a heads up when sil starts telling us where she is putting the cash.

[northernmonkey]

Think speaking to a member of staff at your one of the bank's branches will be the most beneficial thing for you. Also make sure that if you get statements either monthly or otherwise you check for nothing that your unaware of ie balance just to make sure everythings in order. (I recently was worked for a well known bank - fraud department & thats reason I advise you to check as I have dealt with many accounts being completely wiped from ££££ to £ nothing and because a lot of people fail to check statements it only got noticed when was too late )

[modeller]

I don't know if they qualify but the child's trust fund which came out 4 years ago is 100% secure . It can only be acessed by the child at age 18 and the government also gives you £250 to start it off. I don't know what interest it earns but it may be worth looking into.
I believe the next government may stop it so you will have to be pretty quick.