Investing for my niece: How can I protect her money from my brother-in-law?

Ans: Your concern for your niece’s future is completely valid. You are taking the right steps by investing in Sukanya Samriddhi (SSA), SIPs, and gold. However, protecting her investments from potential misuse is equally important. Here’s how you can safeguard the SIP corpus from any interference.

Key Risks to Address
SIPs are in your niece’s name with your sister as guardian.
Your brother-in-law (BIL) might influence your sister to withdraw the funds.
Once your niece turns 18, she will get full access, making it vulnerable.
Steps to Secure the SIP Investments
1. Use Your Own Name as the Guardian
If possible, change the guardian to yourself instead of your sister.
As a guardian, you will control the investments until your niece turns 18.
This prevents any withdrawals without your approval.
2. Invest in a Minor Trust Instead of a Direct SIP
Set up a trust in your niece’s name with a legal framework.
The trust can specify that funds are only for education or marriage.
Your BIL or even your niece (after 18) cannot misuse the funds.
A trusted lawyer can help you create this trust legally.
3. Lock Investments in a Child Plan Mutual Fund
Some mutual funds have child plans with lock-in periods until 18-21 years.
This means no one can withdraw the funds before maturity.
Once she turns 18, she can only use the money for specific purposes.
4. Open a Custodial Account
If trust formation is not possible, invest through a custodial account.
A custodian (you) will manage the funds until a set age.
The account will prevent any premature withdrawals.
5. Keep SIPs in Your Name and Transfer Later
If none of the above work, continue SIPs in your own name.
Once your niece reaches 21-25, gift her the amount in a structured way.
This ensures the corpus remains safe and she gets the funds when mature enough.
Additional Steps for Protection
Do not disclose the full financial plan to your BIL.
Educate your sister on financial discipline and risks of bad investments.
Keep SSA and gold as separate, untouchable assets.
Finally
You are making an admirable effort to secure your niece’s future.
The best option is either a trust, a custodial account, or a child plan.
If not possible, keep investments in your own name and transfer later.
The key is to keep control away from those who may misuse it.
Would you like more details on setting up a trust or other legal protection?

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment