The Ex-Files: Jeremy Sutton on the spouse who took $15k from Sharesies kids’ account to treat himself

In Sharesies Kids Accounts, children are the beneficial owners of the investments. Photo / File

Opinion

OPINION

Q: Last month my husband withdrew $15,000 from our kids Sharesies account to buy himself a new e-bike.

He did this without discussing it with me first and I’m really upset about it.

He said he’d replace the money, but it hasn’t happened yet. This money is supposed to be for our children’s future. Is there anything I can do to stop this from happening again without my consent?

A: Yes, you can stop this happening again. Your husband is in breach of trust by removing the funds from your children’s Sharesies account for his own benefit.

Under Sharesies terms and conditions, a Kids Account operates as a “bare trust”.

What this means is that your children are the beneficial owners of the investments and/or funds in the account and any income generated.

Other companies may have different terms but this how Sharesies works. Investments or funds can only be withdrawn for the sole benefit of the children.

Once the children reach transfer age, they can request to control the account. The default transfer age is 25 but you can adjust this to any age between 18 and 25.

When you and your husband deposit money into the Kids Account you gift it and thereby lose your interest in those funds.

Disclosure

Kids accounts are normally relationship property. It is important to ask your partner if they have any shares in the names of your children.

Role of trustee

The account holder, presumably in your case your husband, is the trustee. The trustee has no beneficial interest in the account and their job is to administer the account for the children’s sole benefit.

Trustees are liable for the consequences of their own breach of trust. So, your husband is obligated to repay the funds he has withdrawn for his own benefit.

If you have the email addresses and passwords, you can check the balance in the account. You may also be able to approach Sharesies and explain what happened and why you need access to the account.

Repaying the account

While there are legal avenues you can pursue for a breach of trust, I would suggest you discuss the above with your husband and make a plan to repay the accounts.

If your children discovered the withdrawal from the accounts, they potentially would be able to pursue legal action against you so it is going to be much simpler to remedy the issue now.

Alternatively, there are other investment platforms where you can open children’s accounts which are attached to a joint account and where you can require two or more people to authorise transactions. One such platform is InvestNow.

Summary

There are two ways to prevent this happening again. You could look at either opening a new account in your control or use an alternative investment platform which allows for two or more people to authorise transactions.