Savings/investments for childrens future

Isn’t 3k cash the same thing, or 3k into a Revolut junior account where you can still set up weekly allowances so it’s not really available to them to spend?
 
conor_mc said:
Isn’t 3k cash the same thing, or 3k into a Revolut junior account where you can still set up weekly allowances so it’s not really available to them to spend?
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Sort of, but the plan is to invest the money into a Vanguard index fund to try to beat inflation.
 
Dan_in_Dublin said:
Sort of, but the plan is to invest the money into a Vanguard index fund to try to beat inflation.
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The point is that you can avoid missing out on 2 x €3K this year (because the Vanguard account isn't ready) by just making a cash gift this year if necessary - and then investing it on their behalf next year along with next year's 2 x €3K.
 
ClubMan said:
The point is that you can avoid missing out on 2 x €3K this year (because the Vanguard account isn't ready) by just making a cash gift this year if necessary - and then investing it on their behalf next year along with next year's 2 x €3K.
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Yes, but my question is, what is the best way to do this, so that this year's €6k gift is unambiguously recorded as being made this year? I don't think Standard Life would accept a cash deposit. Then what? Lodging cash back into our accounts and then transferring funds to Standard Life in Jan may be construed as an obvious dodging of the rules for annual gifts. A bank draft might work, as that can be shown to have been purchased/withdrawn on a certain date. It's also likely that Standard Life would accept a bank draft. Otherwise, a children's Revolut account could be better, as the account would be in my son's name. Suggestions welcomed, many thanks.

Edit: spelling
 
The likelihood of you getting pulled up on this is miniscule so I would just create the paper trail (eg Revolut Junior) and argue, if necessary, that any subsequent move back into your account is simply to accommodate a bank transfer into a fund.

Worst case, Revenue judge that your child has used up 6k of their 400k CAT allowance.
 
Dan_in_Dublin said:
We will try to get the account opened and funded before the end of the year, but I fear we may have left it too late
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The reality is that it's not too late. It's just that you've left it late to start researching how to do it, and do it right. You're also limiting yourself to just one provider by choosing Vanguard.

On these contracts, I'm not a fan of not having a clear trail of the source account (in both donors names) of the money, where it ends up, and its intended purpose. The donor/s may not be around to help the recipient with the paper trail.

You could, in reality, request the paperwork today, complete and submit it ( including AML documents) , be provided with EFT details of the life assurance company to do a transfer of €6,000 to and start a direct debit for €500pm from 01/01/2025. The €6,000 would be invested from date of receipt by the life office. Job done, and policy documents issued to you in next 7/10 working days.

But, that's the execution only model where you don't need advice on knowing what provider to run with, the exact product to request the information on and the fund/s you want to invest in.
 
Hi, what mgt fee are people seeing on the standard life product, quoted 1.5% which is higher than I hoped? Thanks
 
I have always been torn between bare trust and keeping it in our names. The money involved would be 18/19 years of child benefit really.

The reason for keeping it in our names is that it would be accessible should a real need / emergency emerge for our son before he turns 18 and our earning situation also have dropped by then for some reason.

If he did go to college we could just use the money for college fees / accommodation anyway without impact on his lifetime cap which would likely be taken up much later in life (hopefully). But if he didn't go to college I felt it could be taxed.

However a solution would be to agree with my son it needs to be invested say with the goal of a house deposit and transfer 6k (or future equivalent) a year starting at 18. If the first 6k is spend he doesn't get the next instalment!

I recon the pot might get to mid 70k if it got 7% returns so could be fully transferred in 12 years. Obviously tax laws can change a lot but does that make sense as a plan?
 
dave2015 said:
what mgt fee are people seeing on the standard life product, quoted 1.5%
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You need to clarify whether you're talking about a savings plan in your own name or an Annual Small Gifts Tax Exemption plan in the childs name.
 
faketales said:
The reason for keeping it in our names is that it would be accessible should a real need / emergency emerge for our son before he turns 18 and our earning situation also have dropped by then for some reason.
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I put our little person's one in her name partly for exactly this reason- so we couldn't raid it if we felt money was getting tight etc. We have other options if we need a lump sum for some unforeseen reason.

faketales said:
However a solution would be to agree with my son it needs to be invested say with the goal of a house deposit and transfer 6k (or future equivalent) a year starting at 18. If the first 6k is spend he doesn't get the next instalment!
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My goal is to (a) give our offspring choices and (b) give them an upbringing to help enable to make reasonably OK choices. But giving them choices means giving them the choice to make bad or even terrible choices.

But at the end of the day, if you love something set it free. I have no desire or intention to try and keep my child on a leash into adulthood regardless of what I think of the choices they may make.
 
BIG-notorious said:
My goal is to (a) give our offspring choices and (b) give them an upbringing to help enable to make reasonably OK choices. But giving them choices means giving them the choice to make bad or even terrible choices
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I think I trust myself that I don’t go raid it unless there were no other options.

I certainly don’t want to micro manage them. I would however see the money as earmarked for education, first car, house deposit or some combination of those kind of expenses.

I see the options as:

a) If I put it in their name it’s up to them what to do at 18 and I can only hope to give them the tools. I wouldn’t try and hide it from them.

b) Keep it in our name and gift it when we want. May eat in to tax exemption.

C. Keep in our name. Transfer 6k per year. No inheritance issue and we have some discretion if he decide to blow it the first year.

B&C offer that little bit of additional flexibility should a need emerge before 18.
 
ClubMan said:
And how, if it comes to it, can you convince Revenue that this is an annual CAT exempt gift when it's not and the parents retain ownership of the money?
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Sorry. Keep in our name and invest until they turn 18 and then transfer 6k per year.
 
llgon said:
No doubt that's true now while she's little, but it might well change
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There's always the possibility that my attitude will change in the future. That's true of any significant decision I might make relating to anything at all. So what?

But my child will have access to significant funds when they turn 18 and will be free to apply them as they choose. Barring continuously historically terrible stock market performance for over a decade, that's already set in stone. If i fail, over the course of almost 2 decades, to adequately equip them to make decisions which are not completely awful then that is my failure as a parent.

Any 18 year old can work, drive, drink, vote, travel independently, borrow money, join the army, become a police officer etc etc. Society entrusts them with so much responsibility but i should be so lacking in confidence in my own parenting skills that i should be afraid to entrust them with cash? No, that's not me I'm afraid.
 
faketales said:
I certainly don’t want to micro manage them. I would however see the money as earmarked for education, first car, house deposit or some combination of those kind of expenses.
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Making access to the money conditonal on a short list of permitted uses is pretty much the definition of micromanaging in my opinion.

There's a difference between a gift and a contract...
 
BIG-notorious said:
There's a difference between a gift and a contract...
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A lot of parents give gifts to help a child buy a house or for a wedding? Or they pay for college fees, accommodation or some spending money.

Is it not a gift?

Would the parent be micromanaging if they spent all the money on coke and hookers and the parent held on to the next phase of the gift?

Now if it was just 1k. That’s fair enough.
 
faketales said:
Would the parent be micromanaging if they spent all the money on coke and hookers and the parent held on to the next phase of the gift?

Now if it was just 1k. That’s fair enough.
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Um, yes? You either trust your kid or you don't. And worst case scenario and they spend it on something I think is stupid, then they'll learn a valuable lesson about opportunity cost. Because the money tree is only going to bear fruit once .

And it is again a parenting issue- ie your fault entirely- if your 18 year old can't think of anything better to do with their funds than bury their noses in either option A or option B. Children learn most of the important things before age 5 and they generally stay with you for life even (especially...) if the lessonis how be dumb or a horrible human being- anyone who believes otherwise is both ignorant of all the research and in all likelihood looking for excuses for themselves.

Conditioning a gift creates dependence and control. In my view that's not a gift at all.
 
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