Kids account (bare trust), been using it myself
Discussion
Years and years ago, I setup a "Future Saver" account for my son. At the time he was too young to have his own account so it was setup alongside our current account and appeared in our online banking. He never used the account and when he was old enough he setup a current account which he has been using.
This future saver account became an account where we "his parents" would squirrel money to pay for things like tax bills, holidays, home improvements which we have done for at least 10 years.
Today I had a letter from the HSBC informing me that the account is "bare trust" account and that any money in it legally belongs to my son. This is the first time I've been made aware of this by the bank and whilst I'm sure my son would be thrilled by this we now need to move the cash and I was wondering what the options would be to this legally?
My son is 18 next year which could be the reason why this letter has arrived.
This future saver account became an account where we "his parents" would squirrel money to pay for things like tax bills, holidays, home improvements which we have done for at least 10 years.
Today I had a letter from the HSBC informing me that the account is "bare trust" account and that any money in it legally belongs to my son. This is the first time I've been made aware of this by the bank and whilst I'm sure my son would be thrilled by this we now need to move the cash and I was wondering what the options would be to this legally?
My son is 18 next year which could be the reason why this letter has arrived.
Edited by moonigan on Sunday 30th October 10:32
Not really my area, but was there any mention that it was a trust when you opened it? https://www.investopedia.com/terms/b/bare-trust.as...
'Bare trusts, or "naked trusts", grant the beneficiary, as long as they are over the age of 18, the absolute right to capital, assets, and income within the trust.' So perhaps you can retrieve it before he's 18...
Looks like one for Nik.
'Bare trusts, or "naked trusts", grant the beneficiary, as long as they are over the age of 18, the absolute right to capital, assets, and income within the trust.' So perhaps you can retrieve it before he's 18...
Looks like one for Nik.
moonigan said:
I honestly don’t recall being told it was a trust when the account was opened otherwise I would not have used it in the way we have been doing.
I googled 'HSBC Future Saver Account' and this is what they say today: https://www.hsbc.co.uk/savings/products/future-sav...No mention of a trust there, though of course it may have changed over the years.
It would be interesting to call them, pretending you're thinking of opening one, and ask them 'Is it some kind of trust?' If they say no, you could read them your letter.
Googling 'HSBC Future Saver Account Trust' or 'HSBC Future Saver Trust' brings nothing else.
Edited by Simpo Two on Sunday 30th October 10:08
Taita said:
Just get him to take it out and give it to you.
Or just carry on moving the money around like you have (eg move to your account, then close it), it's hardly crime of the year and the chance of having any drama is miniscule.
Don't overcomplicate it
To be honest this is what I was going to do. I'll simply transfer to his current account and then get him to transfer back to our current account. I wanted to be sure that this wouldn't come back and bite me at a later date as the amount involved is not trivial.Or just carry on moving the money around like you have (eg move to your account, then close it), it's hardly crime of the year and the chance of having any drama is miniscule.
Don't overcomplicate it
springfan62 said:
The faq's say withdrawals must be for the benefit of the child.
It seems to be clearly aimed at saving for the child which would seem to imply its in trust for the child, otherwise you would just open a savings account in your own name.
A trust is a legal entity, like a limited company. I'd be surprised if you could set one up without knowing.It seems to be clearly aimed at saving for the child which would seem to imply its in trust for the child, otherwise you would just open a savings account in your own name.
https://www.lawsociety.org.uk/public/for-public-vi...
'Bare trust
This is the simplest trust and gives all assets to the beneficiary as long as they’re 18 years old or over (in England and Wales).
Assets in a bare trust are held in the name of a trustee. However, the beneficiary has the right to the contents of the trust at any time if they’re 18 years old or over (in England and Wales). This means the assets set aside by the settlor will always go directly to the beneficiary.
Bare trusts are often used to pass assets on to young people – the trustees look after them until the beneficiary is old enough.'
So, did the OP sign anything with 'Trustee' or 'Beneficiary' on it?
If you've been getting a preferential rate of interest on the basis that it's supposed to be a child's account then that's fraud if you've been using the account for your own benefit.
Why were you using that account instead of opening another for yourselves?
A bare trust is essentially the same thing as a nominee. Stuff is held in one person's name but belongs to someone else. You can't just switch that on and off at a whim from one day to another.
The bank is correct. One the face of things stuff in that account belongs to the beneficiary, however the stuff got there. Essentially, by gift.
Why were you using that account instead of opening another for yourselves?
A bare trust is essentially the same thing as a nominee. Stuff is held in one person's name but belongs to someone else. You can't just switch that on and off at a whim from one day to another.
The bank is correct. One the face of things stuff in that account belongs to the beneficiary, however the stuff got there. Essentially, by gift.
Simpo Two said:
A trust is a legal entity, like a limited company. I'd be surprised if you could set one up without knowing.
https://www.lawsociety.org.uk/public/for-public-vi...
'Bare trust
This is the simplest trust and gives all assets to the beneficiary as long as they’re 18 years old or over (in England and Wales).
Assets in a bare trust are held in the name of a trustee. However, the beneficiary has the right to the contents of the trust at any time if they’re 18 years old or over (in England and Wales). This means the assets set aside by the settlor will always go directly to the beneficiary.
Bare trusts are often used to pass assets on to young people – the trustees look after them until the beneficiary is old enough.'
So, did the OP sign anything with 'Trustee' or 'Beneficiary' on it?
I suspect the account is in the name of the child, with parents nominated to operate it on the son's behalf.https://www.lawsociety.org.uk/public/for-public-vi...
'Bare trust
This is the simplest trust and gives all assets to the beneficiary as long as they’re 18 years old or over (in England and Wales).
Assets in a bare trust are held in the name of a trustee. However, the beneficiary has the right to the contents of the trust at any time if they’re 18 years old or over (in England and Wales). This means the assets set aside by the settlor will always go directly to the beneficiary.
Bare trusts are often used to pass assets on to young people – the trustees look after them until the beneficiary is old enough.'
So, did the OP sign anything with 'Trustee' or 'Beneficiary' on it?
Therefore any funds in the account belong to the child.
Its all here, https://www.gov.uk/hmrc-internal-manuals/trust-reg...
Quite clearly it is a simple form of trust.
Edited by springfan62 on Sunday 30th October 14:50
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