Many of us when we hit eighteen look forward to drinking inordinate amounts of alcohol - legally – going to an 18-rated movie and legally do all those things that have been denied us for so long.

A few - let’s call them Paris and Tara – will have the added bonus of a call from their bank manager. “Hello,” he’ll say. “Since you are now of age, I am required by law to hand you the contents of an account set up in trust for you. You, my dear, are sticking rich. You lucky s**.”

Being the recipient of a trust-fund windfall, is something we cannot all be - but we can tell you what they are and why they are.

The main befit is that you can control how your assets are used. In our example, twins Paris and Tara’s parents set up their trust fund years ago. The parents waned to provide a nest egg for their little loves. And they wanted the cash to go to their children when they were more able to appreciate it.

This is known in financial circles as a bare trust. When you invest shares or money on behalf of your offspring, you create a bare trust. When the nipper reaches 18, they get the cash to do with what they will.

The benefit is that once inside the trust, the investments are treated as the child’s for the purpose of capital-gains tax. You might, though, pay inheritance tax (40%) if you fail to crate the scheme seven years before you shuffle off his moral coil.

And since all of us - young and old – are entitled to a tax-free allowance of £5,225 a year, any earnings on an investment placed in trust by any one other than a parent counts towards the child’s personal allowance.

The other main trusts to consider are an accumulation and maintenance trust, which allows for greater control if the trust is created for a child or young adult.

And discretionary trusts, often used for groups of people, say all of your grandchildren - and that can include those not yet born. In this case, if you fall out with one of the grandchildren, you can cut him or her out of the trust.

News which comes too late to prevent our Tara and Paris from embarking on a mammoth spending spree. Save something for us, girls.

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