Who actually controls a Junior ISA

When considering opening a Junior ISA on behalf of your child, it’s important to know the rules. The money in a Junior ISA legally belongs to the child. However, until a child turns 18, the investment choices and general management of the ISA belong to a parent or guardian (known as the registered contact). The child the ISA belongs to can actually take over management of it when they turn 16, but the funds cannot be touched until they reach adulthood. 

What happens if the registered contact dies

Death is a fact of life. But what happens when the registered contact of a Junior ISA passes away? As there is only one registered contact, and in many cases, a mother and a father will be responsible for the care of a child if the registered contact dies and their partner is still alive, this scenario is simple. The new (sole) legal guardian simply becomes the registered contact. This would woud need to be supported by a death certificate. 

If the child is 16 or 17, and bearing in mind that at 16 a child can take control of the account, they would simply need to provide a death certificate of their deceased parent and are also known as testamentary guardians. 

What if it’s a guardian who dies, not a parent?

This matters, especially if you are applying for a junior ISA on behalf of a child and you are not their parent but their legal guardian. First of all, we need to define that there are two types of guardians: special guardians – this is court-enforced and where a guardian has enhanced rights to raise a child. Secondly, there are legal guardians, which is a broader term for anyone who has a legal right to raise a child (typically as named in a will), who are also known as testamentary guardians. 

Testamentary guardians – This one is easier to deal with. When a guardian dies, two legal guardians are named in a will. In this scenario, the responsibility for the Junior ISA (and the child if they are under 16) will fall to the next named guardian. 

Special guardianship –  This one is more complicated. If the special guardian was a sole guardian, we enter a legal grey area. The government’s own Special Guardianship Order (SGO) doesn’t actually say what happens. In theory, the child’s parents could resume responsibility for the Junior ISA, but as an SGO is usually granted when a parent is deemed unfit, it is unlikely that a local authority would grant guardianship to the parent. Where adoption is involved, an adoptive parent can become the registered contact when an adoption order is granted by the courts. 

Do you need the other parent’s permission to change the registered contact?

Consent is generally required from the existing parent to change the registered contact. However, there are exceptions to this rule: 

• If the current registered contact passes away or loses mental capacity 
• The existing registered contact goes missing or becomes uncontactable 
• A court orders the existing registered contact deemed to no longer have parental responsibility 
• A court orders a Guardianship or an SGO for the child 
• The courts have ordered that an existing registered contact stop being the registered contact 
• The new registered contact is the adoptive parent of the child  

Most Junior ISA providers deem a contact to be uncontactable after around a year of no responses and returned mail. 

What happens if parents separate and can’t agree on the Junior ISA

It is important to note that here at the Children’s ISA (and most Junior ISA providers), anyone can pay into a Junior ISA. Both parents, grandparents or family friends. If a separation is acrimonious and, for instance, one of the parents who happens to be the registered contact cannot be contacted, there are certain thresholds that need to be met before one parent can assume the role of registered contact (see the bullets above). 

What if the registered contact dies while parents are already separated?

The same death-based exception would apply in this scenario regardless of whether the parents were together or separated. The registered contact would become the new legal guardian of the child – if this is the other separated parent, this would be clear-cut. However, if the new legal guardian of the child would be someone other than the surviving parent, this could then enter ‘speak to a solicitor’ territory and not something a Junior ISA company’s customer service representative could advise on. 

Does a change of registered contact affect the £9,000 annual allowance or existing investments?

In a word, no. And the answer is simple. The annual £9,000 allowance applies to the child and not the named individual. So regardless of who the registered contact is, the child will enjoy £9,000 tax-free savings each financial year. 

FAQs

Can a grandparent become the registered contact if both parents have died?

Yes, if they are the legal or special legal guardian of the child 

Does the registered contact have to be the parent named on the birth certificate?

No. The registered contact needs to be the legal guardian of the child who the Junior ISA belongs to. 

Is money in a Junior ISA included in a divorce settlement? 

No. The money in a Junior ISA belongs to the child and not either parent. 

How the Children’s ISA can help

The Children’s ISA is here to help with registered contact changes or any other queries. Please feel free to contact us with any questions you may have; we’re here to help.