Well, if you don't want to come into a racehorse syndicate with me.....
I agree about giving it to family. Obviously we don't know what will happen in the future, but our grandchildren are likely to need money for education.
So seriously, I would find out about setting up a trust fund for them, with you in control.
I would certainly keep a family "rainy day" pot. When I was a HV, one of my lovely mums suddenly had a serious worry in her 4th pregnancy (having carried & delivered 3 with no worries). Her in-laws paid for a cleaner & nanny, which made all the difference.
You don't say what the financial situation of your children or wider family is. I have known well-off relatives who fund an annual get-together eg: rent a villa abroad for 3 weeks and invite all the family, or a hotel for a weekend. Having the money to enable things like this, is I feel, really lovely (I'm saving!)
Some time ago, dh & I decided to stop giving money regularly to charities (we still of course, sponsor people we know, attend fund-raisers etc.) and instead, we make our purchases & investments as ethical as we can. I appreciate your idea about custodianship of this money, but considering the social benefit of investment can be valuable.