Trust fund for children set up by pil

[PoppySeed2014]

Completely prepared to be told iabu. I really don't know...

We have 3 dc and are struggling a bit financially. Nothing dreadful but we've got into about £3k debt paying nursery fees etc.

My pil have set up trust funds for our dc which they (and only they) can access at 18. The money can't be touched by anyone till then.

Aibu to feel a bit weird that my pil have effectively entrusted my dc with large chunks of cash that my dh and I have no say over? I'm hoping they'll be mature, responsible 18 year olds who'll use the money for university. But... I just feel a bit uneasy.

I would rather the money was put into an account that we can use for their education now or save for when we feel they'll be responsible enough to use wisely.

Hit me with it. Aibu?!

[PoppySeed2014]

To be clear, it's our dc who will be able to access the money at 18. No one else!

[PeachandRaspberry]

Not exactly BU, because I can understand that you would like the money now, but when they are 18 they will really appreciate it, and it will be more of a gift than now.

[Tinkerball]

Whats wrong with Grand parents doing this for their Grand children?

[specialmagiclady]

YAbu I'm afraid; your PIL's money, their decision what to do with it, annoyingly.

(I would feel exactly the same, but ultimately it does allow you to spend money on the stuff your DC need now and not be worrying about the futur as much).

[fluffyraggies]

Is it that you feel they have set it up this way because they don't trust you not to touch it perhaps?

I felt a bit like that when my DM set something up for my DCs.

[PoppySeed2014]

Yeah.... It's more a concern that at 18 they might do something stupid with it like buy a motorbike or something I'm really happy for the money to be set aside for them. But to be given to them when they're a bit older than 18 maybe, or in stages?

[LePetitPrince]

3K debts run up for nursery fees? If you can't afford nursery, take a long hard look at your finances because at the very least, having two parents work should at least mean breaking even financially.

Without a lot more details, I'd tend to agree with your PILs. Imagine if they gave you access to it now and you spent it on nursery fees? You would be putting yourself at risk of having them judge other decisions in your life - nights out, holidays, etc. Having it go directly to your children for university fees removes all that potential for awkwardness.

[PatsysPyjamas]

Yabu. By paying for their education do you mean the grandparents should give you money to pay your childcare bill? Your kids won't see any of that when they are older.

[Chocoholic36]

Yabu. My parents and PIL have done this for my children. I have spoken to my children about this and explained this will be the money they can use to help them get a car or go on a gap year with.

I don't mean to be rude but it seems as if you would rather have the money for yourself to help with bills.

[sunshinysummer]

I would be annoyed. I really don't want anyone giving my children large chunks of money at 18. I saw that happen to friends who then dropped out of college/uni, had long holidays and lots of drinks and blew it all within a year or so.
Many 18year olds would not have the sense to put it towards uni fees or a car or deposit etc. I would rather mine get a Saturday job and go to college/university and appreciate the value of money. Then have access to the money at a point in the future when it can really be of benefit to them-first house type stuff when they are older.

[EarSlaps]

It's a tax thing- my parents are thinking of setting something like that up for my children and my sister's children. In order to get tax benefits (not sure which, I haven't looked into it much), it has to be available to the child at 18.

I've asked my parents if they can have any mail about it going to them so that the boys don't find out about it, just in case they aren't the sort of 18 year olds who will use it sensibly.

[PoppySeed2014]

quietly We're not bad with money. We moved house and have 3 dc who are in private pre-school/nursery. We can repay our (small, interest free) debt in the next couple of months. But thanks for the judgement!

[PatsysPyjamas]

Why is that StickEmUp?

[sunshinysummer]

Infact both sets of grandparents have put a large amount of money aside for our children but in trust which they will not have access to until older. they discussed it in depth with us (and their wills state the same) and I really appreciate it. I do not want out children's lie being 'ruined' (a bit OTT I know!) by a well meant gifts that means they may go off the rails completely. My children are young and I have no idea what they will be like at 18, I imagine the OP feels the same.

However, I would not want the money now for bills and stuff (though we too are in debt) because I know it would inevitably go towards bills and outgoings and not be used as the grandparents wish.

[Blu]

Yabu.

Presumably there are tax advantages to them giving the money in this way?

I do sympathise about the prospect of a windfall at 18, and would hope that from an early age the GP will say things like 'for your Uni fees' or 'for a deposit on a first flat' so that the idea is embedded.

[badidea]

We set up a child trust fund for DS1 and since they're no longer available have a child isa for DS2 - but in both cases once they're 18 they get the cash. Me and DH are both a bit worried about this, but hope to speak, to them enough beforehand so that they realise what they're getting and can be a bit canny (DH got money from his grandad at 18 and he blew it - so he knows the temptations!)

We considered setting up a smaller savings product that they would get at 25 (when they might need it for setting up home etc, or getting a car) but at the moment we're too strapped for cash to do that.

I think it's all about the best childrens savings 'products' on the market to be honest, rather than your inlaws especially trusting 18 year olds with a large amount of dosh.

Hopefully you'll have a good few years to give them some money sense before they can access the funds.

[PoppySeed2014]

Interesting responses... Yes, if it was enough for a gap year or car, fine. But it'll be more than that. earslaps I think we'll just ask that our dc don't know about it until we want them to find out.

Anyone who wants a pre-school/private school bash, please don't. It's not relevant. I'm actually a sahm and my dc only started pre-school age 3. We call it nursery sometimes but it's not childcare nursery.

[WeAllHaveWings]

it is very generous of your pil to set up these trusts for your dc and tbh it sounds in your op like you want your hands on it to pay your nursery debts which are your responsibility.

What education do you want to spend their money on just now?

[Alibabaandthe40nappies]

YABU

It is PILs money, and entirely up to them what they do with it. It is a tax thing that they pass it directly to the grandchildren rather than putting it into an account that you can access.

If you can't afford private education for the three of them then that is your lookout, not theirs.

[JWIM]

Hi OP
My parents have done this for the grandchildren. The children all know and have discussions with their grandad about spending/saving wisely. The two oldest have selected the investment options since 16 and then discussed with grandad, sorted setting up accounts and tax free interest etc. It has been good to add to their own financial awareness and they all respect their grandparents so have no intention of spending without thinking. Grandad has impressed on them his own concern that the money goes to the children direct at 18 (he would prefer into their 20s but that is not possible) and he hopes they will be wise and seek advice from their parents if unsure what to do.
They know they are very lucky so we parents hope they do right by their grandparents.

[Polonius]

Large chunks of money set up for 21 here, based on my own experience. I got lark chunks at both 18 and 21. Whilst the 18th money was fun, the whole graduating, needing to find work and setting myself up as an adult was way harder than life with a student loan. I bought myself a masters degree, learned to drive and paid a large deposit on a London flat with my 21 money.

Money was never that tight at uni, and I'm glad I had it after. I'd done my own finances for 3 years at that point and got more sensible use out of the cash.

Fully understand that this depends on your DCs personalities though.