We were approached by a local firm of Solicitors who were acting as joint Trustees for a Will Trust which left a considerable sum in Trust for the benefit of the grandchildren of the deceased. The grandchildren were aged 16, 12 and 7 and will be entitled to their portion of the Trust fund on their 21st birthdays.
It was recommended that the Trust funds be invested into an insurance bond with each named beneficiary having their own allocation of units. This allowed different amounts of risk to be taken for each beneficiary due to the different timescales that the money would be invested for. It also allowed us to recommend moving into more cautious funds the closer the beneficiaries got to age 21 without affecting the investment strategy of the remaining beneficiaries.
The other advantages of the bond investment was that no self-assessment tax return had to be submitted each year, reducing the administration of the Trust and that at age 21 the bond segments could be assigned to the individual beneficiaries avoiding the need to encash the investment if the funds were not required at that time .
We then provided an annual review to ensure the investments remained suitable looking to reduce risk the closer the children got to their 21st birthdays.