Optimize the investment of your savings by using your children’s Livret A: the practice is not uncommon. Tempting, it is however not without its problems. Reminder of the rules to know before using your offspring’s accounts.
Who owns the money placed in your minor children’s accounts?
3%: this is the remuneration, net of taxes, of the Livret A for almost a year, and for at least another year. If we add this to its total security and availability, we understand that the regulations booklet remains a very popular product. Including the youngest, who can hold one from birth, of course until they reach the age of majority by their legal representatives.
The conditions for holding the Livret A being strictly regulated – only one per person and a payment ceiling set at 22,950 euros, some parents may be tempted to deposit their own surplus cash into their child’s account. A practice that also applies to the Housing Savings Plan (PEL) or the Housing Savings Account (CEL), two products also available at all ages. With the temptation, this time, to optimize its loan rights.
Be careful, however, the rule is clear: from the moment you deposit money into an account opened in your child’s name, the sums become his property, definitively and irrevocably. And this regardless of their age.
What is the right of use?
However, since a minor child does not have the legal capacity to manage his own assets, for example from an inheritance, he depends, for this, on his legal representative (one of his parents or a legal guardian). ). His first duty is toact in the best interests of the child.
Until the latter reaches the age of 16, the legal representative has the possibility of take all or part of the income generated by this heritageincluding interest on savings accounts, as compensation for care and education costs.
On the other hand, it’s not supposed to touch the capital, which is the property of the child. Once of age, he can also demand accountability for the use that was made of his money, possibly before the courts. And jurisprudence is on its side: it will then be necessary to repay the equivalent of the unduly deducted capital.
Can children have the money deposited in their account?
In addition to the Booklet A, the PEL or the CEL, the child can, from birth, hold certain specific tax booklets. At 12 years old, he can also open a Youth Booklet, exempt from taxes and social security contributions, but limited to 1600 euros in payments, excluding capitalized interest. A withdrawal or even payment card (with systematic authorization) can be attached to it. But its use is still subject to authorization from the legal representative, who sets the withdrawal limit.
From 16 years oldthe young person has theoretically no longer need this authorization to make withdrawals. But the parents or guardian retain the power to object.
Finally, its majority, the young adult can dispose of the money placed in accounts in his name as he wishes. Even if this savings was not originally intended directly for him.
In summary
Placing excess cash in an account opened in your child’s name is undoubtedly tempting, but presents risks if the money is not really intended for them. The family affairs judge has in fact a right of review over use which is made of these sums, and, if necessary, withdraw from the parents the legal enjoyment of their property and force them to repay.
This type of assembly is therefore advise against. Better to be content with pay into your children’s accounts the sums you really want to donate to themor to opt for other investments, even if they are less profitable or less liquid.