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Old 01.01.2021, 16:47
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Advice for a newborn

Hi all,

in early December our first child has born. We had already planned to put some money aside and to create an account for him containing equity investments for the future. My mom as well asked to participate but she wants the account to be solely in the name of the child.

I could not find anything wrt this. I saw the usual postfinance/creditsuisse accounts but i have no interest in parking money for 20 years at 0% ir.

What do you suggest?
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Old 01.01.2021, 18:09
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Re: Advice for a newborn

Children under 18 cannot have accounts solely in their name.

Tom
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Old 01.01.2021, 18:47
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Re: Advice for a newborn

I think UBS has something like your mom asks - it's in her name and child name and it's handed over to the child when it's 18.

None of my business but when my own parents tried to play those games (like I will give the child money but don't trust you) I had to cut off the manipulation early and swiftly. But perhaps I am.projecting

Other than that - Banca del Ticino has currently the best children account in terms of interest and no obligation to have other accounts with them.

Lastly, you could also put a sum aside with a roboadvisor. Even 100 or 200 CHF/month will grow a nice sum by the time the child turns 18.
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Old 01.01.2021, 18:51
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Re: Advice for a newborn

Grandma is off to a bad start, this is very sneaky and controlling. You either give or you don't, if she doesn't want to play with your terms then leave it to her to find a solution and implement it.

If you want it to be invested in equities then it has to be in your name, just don't even try to put yourself in such bureaucratic nightmares.

There is either trust or there isn't, in which case she can keep her money is what I would say. And of course threaten her back that the child will hear all about this when they're older. That usually put the grandpas in their place quickly.
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Old 01.01.2021, 19:32
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Re: Advice for a newborn

I agree about not entering into games of manipulation. Just don't even go there.

If Grandma wants to contribute to any kind of savings or investment plan for her grandchild, that's lovely, and she's welcome to do so, on her own terms, within whatever restrictions and freedoms that she feels are right for her.

If she doesn't trust you, as her child, well, that's her prerogative, too. Not very nice at all, but she'll have her notions of why that is so (whether or not those are reasonable).

It's probably not worth the effort, or the relational bruising, to try to persuade your mother to see things your way. Just leave Grandma to get on with her kind of financial contribution for her grandchild, whichever way she wants. Thank her, and just say you and she can each do things separately, and it'll be okay. And you then provide for your child on the terms that you think are right for you and your child.
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Old 01.01.2021, 20:33
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Re: Advice for a newborn

It's quite common for grandparents to open their own separate account for their grandchildren so that parents are not able to withdraw funds.
If she will not buy stocks whatever, it's her choice.
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Old 01.01.2021, 22:32
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Re: Advice for a newborn

We opened a children savings account with BCGE. And, an investment fund account, where we make a monthly standing order equivalent to the amount of the family allowance we receive for him.

His investments have grown by 8% in 2020.

The accounts are in his name, either parent can change the investments, but we cannot withdraw the money, and it will be under his control when he reaches 18.

They gave him a little gold ingot when we opened the account.
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Old 01.01.2021, 22:45
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Re: Advice for a newborn

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If you want it to be invested in equities then it has to be in your name, just don't even try to put yourself in such bureaucratic nightmares.
My daughter (aged 1) has equities in her own name set up by grandmother.

Hargreaves Lansdown.

She's the best performer in the family - about 110% up since her account was opened 12 months ago!

Last edited by HickvonFrick; 01.01.2021 at 23:00.
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Old 01.01.2021, 22:52
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Re: Advice for a newborn

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The accounts are in his name, either parent can change the investments, but we cannot withdraw the money, and it will be under his control when he reaches 18.
I considered doing this but decided against as I don't really want them to have free access to substantial funds at that age.

I'll help but I'll be making the calls until they are earning good money of their own. I had access to relatively decent funds at 18 and probably shouldn't have done. I didn't blow it but I'd have made different choices with the benefit of age and experience.
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Old 01.01.2021, 22:53
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Re: Advice for a newborn

We were talking about it with my wife the other day. I explored options offered by CS with children’s savings account opened by parents and they only offer the interest rate of 5% up to amount CHF1000 and above it is mere 1%. Quite little to be honest with you. I think that stock market investment in good tech companies would be a better gamble with the future.

https://www.credit-suisse.com/media/...ctsheet-en.pdf
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Old 02.01.2021, 02:04
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Re: Advice for a newborn

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I think UBS has something like your mom asks - it's in her name and child name and it's handed over to the child when it's 18.
I think that’s gone now or maybe the flexibility is reduced. My kids Godparents set up such accounts, but because of some changes the accounts had to be transferred to me a couple of years before the reached 18. That’s about 10 years ago now.
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Old 02.01.2021, 02:29
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Re: Advice for a newborn

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None of my business but when my own parents tried to play those games (like I will give the child money but don't trust you) I had to cut off the manipulation early and swiftly. But perhaps I am.projecting
Having seen a case where various contributed to a child's education fund, only to get greedy once that fund had grown to a large number, having something to protect the child is not a bad thing, IMO. Conversely, I'm sure there are cases were the child tookt he money and squandered it on something else.
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Old 02.01.2021, 12:34
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Re: Advice for a newborn

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We opened a children savings account with BCGE. And, an investment fund account, where we make a monthly standing order equivalent to the amount of the family allowance we receive for him.

His investments have grown by 8% in 2020.

The accounts are in his name, either parent can change the investments, but we cannot withdraw the money, and it will be under his control when he reaches 18.

They gave him a little gold ingot when we opened the account.
Thank you, this looks what i'm looking for. You confirm we can potentially invest in equities, right?


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I think UBS has something like your mom asks - it's in her name and child name and it's handed over to the child when it's 18.

None of my business but when my own parents tried to play those games (like I will give the child money but don't trust you) I had to cut off the manipulation early and swiftly. But perhaps I am.projecting

Other than that - Banca del Ticino has currently the best children account in terms of interest and no obligation to have other accounts with them.

Lastly, you could also put a sum aside with a roboadvisor. Even 100 or 200 CHF/month will grow a nice sum by the time the child turns 18.
I will save the fees and invest only in VT US honestly.

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Grandma is off to a bad start, this is very sneaky and controlling. You either give or you don't, if she doesn't want to play with your terms then leave it to her to find a solution and implement it.

If you want it to be invested in equities then it has to be in your name, just don't even try to put yourself in such bureaucratic nightmares.

There is either trust or there isn't, in which case she can keep her money is what I would say. And of course threaten her back that the child will hear all about this when they're older. That usually put the grandpas in their place quickly.
To us this is perfectly reasonable. I'm not sure why all of you are judging this negatively (perhaps cultural difference?) but if my mother wants to give some money to the baby and wants to make sure he will be the sole beneficiary i don't see anything wrong with this. We are in perfect relationship and there is no trust issue here.

All in all, only the BCGE solution may be feasible for the time being. Any other thought?

Thanks
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Old 02.01.2021, 12:45
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Re: Advice for a newborn

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Thank you, this looks what i'm looking for. You confirm we can potentially invest in equities, right?




I will save the fees and invest only in VT US honestly.



To us this is perfectly reasonable. I'm not sure why all of you are judging this negatively (perhaps cultural difference?) but if my mother wants to give some money to the baby and wants to make sure he will be the sole beneficiary i don't see anything wrong with this. We are in perfect relationship and there is no trust issue here.
It is a gesture that indeed the grandma should have control over, not the parents if it is not them who decided to gift...I am with you on this. Also, the fact that some at 18 weren't able to handle investments wisely, doesn't mean that your child will. Our kids are growing up in a country that has very sophisticated debt/investments/economy courses for kids and here there are obligatory. This is Switzerland that we are talking about. A child without this fund and without an extensive family/connections network that locals have here, will have a rougher start. Lot of expats don't think that way.
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Old 02.01.2021, 15:08
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Re: Advice for a newborn

Keep it in their own account until whenever, then give it to child, problem solved!

Also, any account of a minor child counts as part of the parents' assets for tax purposes, just saying.

Tom
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Old 02.01.2021, 15:26
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Re: Advice for a newborn

I don't know if there is a cultural difference, or not, but I am surprised by the reaction to a relative setting up an account in a child's, not parents', name.

In the US it's quite common for grandparents, aunts and uncles, godparents, and other relatives to set up accounts in the child's name or even a trust with the child as beneficiary. These are often earmarked for university costs. Instrument dependent, there can be tax advantages to doing so.

Obviously you keep the parents in the loop, so they can factor in these accounts when planning for financing the child's education.

So maybe not so much cultural but rather differing financial systems...
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Old 02.01.2021, 15:27
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Re: Advice for a newborn

For anyone interested on the legal aspects of children's property, who is entitled to manage it, for what it can be used, etc.:
https://www.admin.ch/opc/en/classifi...ndex.html#a318

For my part I've opened a child's account with Postfinance and have a standing fund plan which invests each month into global fund, which then gets turned over to my child's control at 18.

If you want to block a parent's access to the funds or to limit the usage of the funds for specific purposes (i.e. education), you will need to go down the route of establishing a trust or similar. In this case it is probably easier to keep the funds on a separate account and maintaining control.

https://www.postfinance.ch/en/privat...-possible.html
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Old 02.01.2021, 15:47
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Re: Advice for a newborn

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Keep it in their own account until whenever, then give it to child, problem solved!

Also, any account of a minor child counts as part of the parents' assets for tax purposes, just saying.

Tom
Thank you for the information, i did not know this but it doesn't change anything. Regarding the first sentence, the purpose of this thread is to find a solution given that we cannot act that way

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I don't know if there is a cultural difference, or not, but I am surprised by the reaction to a relative setting up an account in a child's, not parents', name.

In the US it's quite common for grandparents, aunts and uncles, godparents, and other relatives to set up accounts in the child's name or even a trust with the child as beneficiary. These are often earmarked for university costs. Instrument dependent, there can be tax advantages to doing so.

Obviously you keep the parents in the loop, so they can factor in these accounts when planning for financing the child's education.

So maybe not so much cultural but rather differing financial systems...
Exactly. Makes total sense to me.
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Old 02.01.2021, 17:18
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Re: Advice for a newborn

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Hi all,

in early December our first child has born. We had already planned to put some money aside and to create an account for him containing equity investments for the future. My mom as well asked to participate but she wants the account to be solely in the name of the child.

I could not find anything wrt this. I saw the usual postfinance/creditsuisse accounts but i have no interest in parking money for 20 years at 0% ir.

What do you suggest?
Let me give you my 50 cents -as personal experience. My father had that (at that time avant-garde) idea. In 1969 he opened an account and invested in equities, so 'we could use it to pay the univesrity). . A serious amount of money at that time. He died when i was 13 years old (and a lot of things were left on 'standby).

Worth of that investment when I reached 20 years old) ??.... peanuts. zippo. zero, nil. nada. I had to work my a$$ off to pay for university studies -- and very proud of it, by the way.

Since then, equity markets for me, are as good as going to the casino in Montecarlo. For the thrill of the risk. For solid long term investment, there are other ways.
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Old 02.01.2021, 17:47
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Re: Advice for a newborn

It's time to bring back the good old Tontine.

https://www.youtube.com/watch?t=169&v=_PprS91tvx0
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