I am concerned that the advice given is incorrect.
Firstly, from the HMRC website http://www.hmrc.gov.uk/inheritancetax/how-to-value-estate/debts.htm they state:
"You can deduct funeral expenses from the value of the estate, plus a reasonable amount for mourning expenses. Expenses can include a reasonable amount to cover the cost of:
- refreshments for mourners
- necessary expenses paid by the executor or administrator when arranging the funeral
- a headstone to mark the grave"
Also, from the Govenment website here: https://www.gov.uk/make-a-claim-to-a-deceased-persons-estate it states:
"If an entitled relative survived the deceased but has since died, that relative’s personal representative must make a claim to the deceased person’s estate. A personal representative is either the executor of their Will or the person entitled to share in their estate if they did not leave a Will."
This would mean that the deceased beneficiary's mother would NOT be the personal representative of his estate as she is not an entitled beneficiary. However, the mother of his child (as parent and legal guardian) would be acting as the personal representative on their son's behalf.
Finally, any investments with National Savings & Investments for children are not suitable as they can be accessed by the parent.