Optimizing the investment of his savings by using the Livret A of his children: the practice is not uncommon. Tempting, it is however not without problems. Reminder of the rules to know before using your offspring’s accounts.
Who owns the money placed in the accounts of your minor children?
Net income of 2% (and even more from next February 1), security, availability: the Livret A remains a very popular product with the French. Including the youngest, who can hold one from birth, of course managed until they come of age by their legal representatives.
Since the conditions for holding the Livret A are strictly regulated – only one per person and a payment ceiling fixed at 22,950 euros – some parents may be tempted to deposit their own surplus cash in their child’s account. A practice that also applies to the Housing Savings Plan (PEL) or the Housing Savings Account (CEL), two products that are also available at all ages. With the temptation, this time, to optimize its loan rights.
Be careful though, the rule is clear: as soon as you deposit money in an account opened in your child’s name, the sums become his property, definitively and irrevocably. And whatever his age.
What is the right of use?
However, since minor children do not have the legal capacity to manage their own assets themselves, resulting from an inheritance for example, they depend for this on their legal representative (one of their parents or a legal guardian). ). The latter’s first duty is to act in the interest of the child.
Until the latter turns 16, the legal representative has the possibility of deduct all or part of the income generated by this heritageincluding the interest on savings accounts, as compensation for the costs of care and education.
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On the other hand, he is not supposed to touch the capital, which is owned by the child. Once of age, he can also demand accountability for the use that has been made of his money, possibly in court. And case law is on his side: it will then be necessary to repay the equivalent of the capital taken unduly.
Can the children dispose of the money deposited in his account?
In addition to the Livret A, the PEL or the CEL, the child can, from birth, be the holder of certain specific tax savings accounts. At the age of 12, he can also open a Livret Jeune, exempt from taxes and social contributions, but limited to 1600 euros, excluding capitalized interest. A ATM card, or even payment (with systematic authorization), can be attached to it. But its use is still subject to the authorization of the legal representative, who sets the withdrawal limit.
From 16 years old, the young person theoretically no longer needs this authorization to make withdrawals. But the parents or guardian retain the power to oppose it. Finally, at the age of majority, the young adult can dispose of the money placed in accounts in his name as he pleases. Even if this savings was not originally intended for him directly.
In summary
Placing excess cash in an account opened in your child’s name is certainly tempting, but presents risks if the money is not really intended for him. The family court judge has indeed a right of inspection on the use who is made of these sums, and can, if necessary, withdraw from the parents the legal enjoyment of his property and compel them to reimburse.
This type of assembly is therefore not recommended. Better to settle for pay into your children’s accounts the sums you really want to donate to themor to opt for other investments, even if these are less profitable or less liquid.