Trusts For Children
Setting up a trust for children is one way to secure your child or grandchild will receive a payment or asset when they reach a certain age. There are various different trusts which can be set up specifically for children and which one you choose will depend on your financial circumstances.
The National Child Trust Fund
In 1995 the Labour government set up a national Child Trust Fund (CTF) which allowed tax-free savings to made into a certified CTF account provider. An initial payment and voucher was given by the government which could be deposited into these verified providers. Although this scheme has now been abandoned your child may still be entitled to a Child Trust Fund voucher if born between certain dates. CTF accounts are much like ordinary savings accounts except the interest earned is exempt from tax. There may however be a limit to how much extra you can deposit.
Private Trusts For Children
Alternatively, you may wish to set up a private family trust fund for assets which your child can benefit from when they are older. A private trust fund for children means that assets other than money such as property and land can also be secured. However, private trusts for children will often be subject to strict tax laws and regulation. Setting up a private children's trust may be complex and often the requires the assistance of a financial advisor or a solicitor.
Whichever children's trust you choose, or if you would like guidance on the best trusts available for children, it may be worthwhile seeking the help of an independent financial advisor:
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