Question about children’s access to a child’s savings fund or account

MIDLANDSMAN

Hi. I wonder if anyone has a suggestion or advice about how to navigate a problem that has arisen between me and my wife in regards to setting up an investment or savings account for our children.

basically we were looking at setting up an account or investment through a broker or bank for our young children so that they would have savings accrued if and when they go to college or even a deposit for a house when they reach that age. I would also like to use the €3000 small gift excemption where I can to reduce any future possible inheritance tax or CAT.

However, my wife is dead set against the idea of the children getting any access to money or even knowing that they have funds of their own until they are 21 years and ideally not until they are 25. She thinks that they will doss in school, will lack motivation, avoid work and blow everything in Ibiza or something stupid if they think that there is a pot of money waiting for them (they are 6 and 8 currently). She said she would prefer the taxman to get inheritance tax than they children to waste it or waste their education.

Is there any way that an account or investment could be set up so that the children will be the beneficiaries of the accounts but won’t have access until ideally in their 20’s (it seems that they might be blocked for access in some products until they are 18). Or perhaps they might have access at 18 but there might be a way to keep it secret from them until God forbid, it only shows up when my will is read (apologies for being morbid).

thanks

Citrus_8

https://www.boards.ie/discussion/2058249594/question-about-children-s-access-to-a-child-s-savings-fund-or-account

Apologies for not answering the question in full but I'll just give my opinion in regards to raising children with money management awareness. New generation has a big problem that parents give them too much so they think everything comes for free or with a very little effort. Probably I'd raise children in the way so that they learn how to use money. Explain the income and expenses, give small money to get a small purchase from a local shop and see if a correct change with a receipt taken, show how much you pay for bills, later analize bank statements together.

Henry Ford III

Easy.

Set up the plan with the children's name as the life assured and the parents as plan owners.

p.s. Get professional and independent advice (i.e. not from a bank).

Senature

We have a situation where two joint accounts were set up. Child is principal name, Dad is the second name. Child is aware that an account exists, as they had to sign some forms initially, but has little to no knowledge of the amount in it, or account numbers etc.

One account (with the majority of funds) requires both signatures for withdrawl.

The accounts will be accessed at the time Dad feels is appropriate - first car, first property, first child, wedding etc.

We were also concerned about the money being blown by a teenager, and/or the impact of them knowing they have a safety net of sorts, as the money would seem huge to them but will only be a contribution towards some of these expenses in reality.

IMO, tell the kids as little as possible!

Senature

Also I should add that if Dad passes away before all the monies have been given to the child, the child will be the beneficiary of the money as it is their name on the joint account.

If this were to occur, mum could possibly still just hold off on providing the account details to the child until the appropriate time?

MIDLANDSMAN

Hi. Thanks to all for their advice and help to my query. You have given me a few ideas to think about and to investigate further.