Legal considerations regarding child assets: what should you keep in mind?

What constitutes a child's assets?
Any assets that a child receives for savings purposes, such as gifts or inheritances, are considered to be the child's assets. They belong to the child and are managed by the parents as long as they have parental authority (Art. 318–327 Swiss Civil Code).

How are the child's assets managed?
At True Wealth, the child’s portfolio is opened in the child’s name. The parents manage the portfolio on the child’s behalf until the child reaches the age of majority. Upon reaching the age of majority (18th birthday), full authority to dispose of the assets passes to the child.

Can the child’s assets be used?
The assets themselves may only be used with the approval of the Child and Adult Protection Authority (KESB) (Art. 320 Swiss Civil Code). Nor may the parents use the income from the child’s assets – such as dividends or interest for the child’s living expenses, upbringing, or education, or spend it in any other way, if the assets have been transferred to the child with this express condition, under the stipulation of an interest-bearing investment or as savings (Art. 321 para. 1 Swiss Civil Code).

What does this mean in practice?
Parents may not make withdrawals from the child’s portfolio to cover their own expenses. Withdrawals for the child’s benefit – such as for educational expenses – are also not permitted without KESB approval. True Wealth is entitled to refuse such requests or to demand additional clarification.

When does parental administration end?
Parental administration ends when the child reaches the age of majority or earlier if parental custody or the right of administration is revoked.