DD to be left £200k - Help!

[tb]

My uncle has been staying with us recently. Some time ago he said that he was going to leave everything to me.

He told me while he was with us that he's left dd the income on £200k until she's 21, and she will then have the capital outright.

The only problem, she's 14, and very, very immature. If she meets up with friends eg for a sleepover, she insists on buying all the sweets and other associated crap.

There is a strong possibility that she suffers from pathological demand anxiety, and having money - even ?50 - seems to make her more anxious than usual, and she fritters it away.

So, dh and I are rather worried about her having £200k in her hot little mit. My uncle is nearly 90, so this is likely to become a problem in just under 7 years time.

Is there anything we could do, to have some control over what she can/can't do with such a large wodge of cash?

Thanks for your help.

[tittytittyhanghang]

But she's not getting it till shes 21. Years away. And at 21 she is old enough to do what she wants with it, whether investing it in a home or frittering it away all on black?

[ClaireBunting]

Ask your uncle to set up a trust fund? Sorry, no idea how these things work, but I believe they can pay small amounts of money and hold back the capital until the beneficiary has reached a certain age or so say the movies.

[headfairy]

I'm not a financial expert but I was left some money in a trust fund, and I had to get the approval of the trustees for any expenditure (and provide receipts afterwards) so I would agree a trust fund would be a better option.

[RedHelenB]

Disagree - if she's not old enough at 21 to have the money then she never will be!! The income on 200,000 will help her through uni etc if she goes - lucky her!!!

[headfairy]

that's rubbish RedHelen, I was left more than that and at 21 I would have definitely have spunked it up the wall. I got some at 25 I put towards a flat and a car... I got some more at 33 to do some home improvements, pay for part of my wedding and buy a larger car as we had dcs by then. The last bit will pay for our next house move, there's no way I would have been as sensible at 21, but something about having children and maturity changes that.

[tb]

Thanks for all the replies. The thing that really bothers us is that, for a start, it's a huge sum of money, probably more than we will be able to leave her. Also, it's the anxiety that having such an amount will create for her - in some ways, probably for ever, she needs to be protected from the effect that has on her.

Even if he'd left everything outright to me as his niece, it will all go to dd. She's an only child, and we live in France, so legally she gets 100% which would be in line with our intentions, and our intention would have been to buy her a car at 18 for when she goes to uni - providing she has passed her test, and then a flat when she graduates.

While he was with us, and had heard a little more about how she is, he was laughing at the problems we will have when she is left the money.

As an example, my dm died in Jan and left her, among other things, a 2ct diamond solitaire engagement ring. Dd's immediate response was that, as she hadn't known her gm, and her gm hated me and her gf, she was going to sell the ring and buy a Canon dslr. Just worried about how hard my uncle worked to amass that sort of sum, and that she could blow it on a whim/due to the anxiety of having that much.

Gaah! Elderly relatives that like amusing themselves by writing wills that create awkward situations!

[Jux]

Well, you have 7 years in which to teach her to be sensible about it.

She could write down now what she would like to spend it on. The in a years's time she could write down what she'd like to spend it on, and you can show her what she wanted to spend it on a year ago, and you can discuss how much that's changed, and was her original idea a bit silly or was it sensible, and if she'd spent it all on sweets at 14 how would she be feeling at age 15 when she'd like to spend it on something else. Keep that up.

Involve her a bit in your financial planning so she can see what factors you take into account etc. With any luck, when she gets to 21 she'll spend most if pretty sensibly, and only splurge some.

[ImperialBlether]

So can I ask whether he's leaving everything to her or to you, too?

If he is leaving something to you, obviously you are free to talk to him about his Will. If he isn't then it might sound as though you want him to leave it to you instead.

But assuming you are to inherit too, why don't you ask him whether he could leave it to her when she's 25 rather than 21? That might make some difference. She'll have the income from it up to that point anyway.

Really, though, I think the way headfairy received her inheritance was ideal. I think people are too young in their early twenties to receive such big sums of money.

[Buntingbunny]

I was engaged at 20 and married at 22.

I'd have bought a house in a slightly nicer area than we did, invested half and paid for my own wedding rather than letting my parents.

[LoopyLoopsCorgiPoops]

Crikey. Lucky girl!

I think your uncle needs to speak to a financial advisor then do what he decides is best. There's not a lot you can do about it really.

[duchesse]

How about putting the whole lot into a bond paying an income, when the time comes- on 200,000 she could get 10,000/year and still have the capital. The 10,000 a year would easily be enough to piss up the wall if she wishes and feel very well off through university whilst also having a loan, or she might be sensible by then and live on that income. DS's trust fund has been in a bond for the last 18 years and as he's turned out to be really sensible with money, his GM decided that the best option was to give him the control over the money whilst strongly advising him about placing it. Your DD need not realise that she can get control over the money at 18, need she? Especially if she gets a tidy sum into her bank account 4 times a year- if she is really immature she might not ask too many more questions.

My personal feeling is that you need to get financial advice on this from an expert. There a very well-known firm in Bristol that we use that we have found to give extremely good advice, and they are also very good fund managers.

[tb]

Thanks Jux that's quite a good idea. She's already said that she doesn't want a mortgage as a mortgage is "debt" and in her eyes to be avoided like the plague.

He's given me the bare bones of his will - his house in France (he was born in France but has lived in the UK since the war), and any monies in his Crédit Agricole account he has left to his second cousins in France. His UK bungalow, and presumably monies in the UK account, he has left to me, the £200k to dd. I would also imagine that he has left some money to the RAF benevolent fund or similar.

In total, he reckons he's worth about £500k, although think he has rather over-estimated the value of his bungalow. He thinks it's worth about £250k, but one sold in his road for about £150k. Total value may be less than that - he's just sold his boat and didn't get as much as he thought he would.

He was thinking of selling up and returning to France, but, when I pointed out that his legatees would be paying the equivalent of IHT at either 60% or 80% he thought he would be better staying put. Also his house in France is over 200 years old, and is built of straw/mud-type bricks and is horrendously damp, so not really good for his health.

Any investment made after his death will have to be ok with respect to the French tax system as that's where we live. Until dd is independent, her income is taxed with ours, and so as non tax-payers we need to be quite careful.

[RedHelenB]

I think you need to let go - when she's an adult she's an adult. Tbh, I wouldn't really see it as any of my business what what my children did with any money they received then.

[ImperialBlether]

Yes, Helen, but the OP is clearly concerned with her daughter's immaturity. It's only seven years' time - not long for a girl who's very immature now.

[RedHelenB]

So she blows the money - is it really something to get tied in knots over!!??

[RedHelenB]

BTW _ i wouldn't expect any 14 year old to be mature about money so not that unusual.

[ImperialBlether]

That's a ridiculous thing to say, Helen. That money would buy the OP's daughter a house. It would give her the freedom to stay at home with her children, rather than working full time when they're young. It would pay for her university fees or a gap year or training in a specialist area.

It's crazy to say it wouldn't matter if she blew it all away.

[duchesse]

My 14yo is very good with money. Nearly 19 yo DS is as well- DDs fully expect him to become a millionaire. 17yo DD has a slight Republic sale habit but also pretty good. She has 2 jobs to save for something she wants to do this summer. Not impossible for teenagers to be pretty good with money.

[RedHelenB]

No, she blows the money & then has to do what the rest of us have to do - work to get the things we want. I am picking up possible tension here between mother & daughter & at 21 I really would not have appreciated my parents interfering, I was an adult.

[HeadsShouldersKneesandToes]

What Jux said - you have 7 years to help her develop maturity and responsibility. Could you play family board-games that have an element of saving and investing within them? Play a fantasy game with her of - what would you do if you were given 2p; 20p; £2; £20; £200; £2,000; £20,000; £200,000; £2,000,000 - keeping it light and fun but you could talk about lots of different scenarios to help her think about these things (she doesn't have to know that one of these is a real possibility)

Who she is at 14 will be very different from who she is at 21 (and yes she will be different again at 28 and 35) so you may be worrying unnecessarily.

I also see RedHelen's point - obviously it would be distressing if all the money gets frittered away, but there are millions of 21 year old's every year who manage to get through their 20's and into a satisfactory life style in their 30's WITHOUT inheriting £200,000. It's important that this inheritance shouldn't be the defining thing about her adolencence and young adulthood.

[ethelb]

"bunting, no offense, but do you really think you will get change from £200k after buying a house in a 'nice area'. Even oop north that's a heck of a challenge no???

OP, speaking from far too much experience of friends losing parents in their late teens, early 20s. They all took some of the money, purged on designer stuff trying to fill a hole, and then came to their senses.

£200k is an awful lot. Even they wouldn not have spent it in a shopping trip.

One thing that worked was they got access to some money at 18, and then the rest invested for them (including rental imcome from property) until they turned 25.

Can you just book in an accountant to speak to her on her 20th bday? Just make out it is the done thing to be prudent? She might listen to an accountent more than you.

[Harr1etJ0nes]

Ethel-Can get a nice house in a nice area here for £100 k.

I would approach uncle about setting up a trust until 25 if you are that worried. Then if she changes ( most likely) she can approach the trustees about the uni fees/house/car etc.

[ethelb]

@harr1et where are you? seriously nearly priced out of the rental market atm.

[Harr1etJ0nes]

South Cumbria. Parents sold their 3 bed terrace, nice area, good schools, £90k last year. There's loads of similar round their area.
We are almost ( the important bit!)lake district & £100k plenty for nice 2 bed. Inside the lakes prices shoot up.

[Marne]

She's only 14 (most kids would blow money at that age), i'm sure by the time she's 21 she will be able to control herself a little (maybe use it to go towards a home?).