What’s a bare trust?
A bare trust is a trust that’s set up by a trustee for the sole benefit of the beneficiary. Although the trustee manages and operates the account, the beneficiary holds the right to all money deposited.
In the case of a Kids Account, the adult will set up the trust for the child—who’ll be the beneficiary of the trust. The adult managing the Kids Account will become the trustee of the trust—the person who can manage and operate the account.
Your role as trustee
By creating a Kids Account, you agree that your intention is to set up the Kids Account as a bare trust for the child, and any activity that occurs within the Kids Account must be for the child’s benefit only. You can’t withdraw any money you’ve deposited and use it for yourself.
The trustee must declare that the Kids Account is for the benefit of the child, and will be passed to them at the age set by the trustee (the transfer age). The child has rights to access the money and investments in the Kids Account at the transfer age set by you.
Each deposit into a Kids Account is essentially an irreversible gift to the child.
For any questions on the legal structure of a Kids Account, send a message to help@sharesies.com.au.