Would you give an 18 year old access to 50 grand + via child isa?

[Willbeatjanuaryblues]

Just wondering.
There maybe chance gp are willing to put full amount in which would be 50 grand plus for eldest child. They said they are happy with the the child getting access at 18.

I'm not sure it's a great idea. I have another thread about uni fees etc which this money could go on but tonight with dh... I was discussing the power aspect.

Eg dd wants to go to out, normal 18 year old may not have funds but we say stay in tonight, she says... F you I'm paying for taxi I have the means....

Just check the rules on the ISA. We've just had to deal with (a much smaller) amount for the kids via inheritance, and could only put in 4260 a year into our scheme.
Do the GPs want to gift it all now? In which case it will have to go into a different type of account....

the other issue

Mil had said in the past in bitter way... About dh and the money they spent on his eduction.

She tends to moan and be bitter about everything like that.

Would it matter when she's older and she does not this to my dc, if she feels they havant spent the money well?

Will it be used as a tool to make them feel guilty?

I would put it in a trust fund so that they can benefit from the money but not control it (although they can of course compel trustees to realease the funds when they are of age but if they manage to figure that out they are probably sensible enough to spend it reasonably).

They are super controlling

I would probably be as, if not more worried, that the in-laws were doing this as a means of exerting control on your DC and making them feel beholden so they can pull their strings.

It was always a worry of mine with my Ex MIL. Tbh I was somewhat relieved when she disowned my DD after I divorced her son.

I know a girl who was in this situation - spent huge chunks of it on holidays, where she also paid for all her mates to go along as well, and clothes both for herself and her friends. I've no idea if she has much/any left (I don't know her THAT well).

I would say that a monthly allowance would be better, use the bulk for Uni costs and transfer the balance (if any) upon graduating at 21. I have a DD who is 18 and away at college, and although she is fairly sensible, she would not be mature enough to use/invest this cash wisely if she were to be in this position, it would go on clothes, makeup, going out, takeaways and other similar small purchases

but we just won't tell her about stocks

Unfortunately it doesn’t work like that, the financial institutions write direct to the child as they approach 18th and all parental access stops on their birthday. So you can’t just not tell them about it as some on here are saying, they will be told automatically by the bank or investment house.

In terms of investing till 21 or 25, the only way that I know of is to set up a full trust, with associated trust costs that could potentially eat away the money in the fund. There may be other ways of delaying money to 21 and 25 that I am not aware of but not many I suspect.

DC got an unexpected but quite large inheritance when they were 18 and almost 16. We had no control over when they got it as the distant relative that died didn’t stipulate an age and all other beneficiaries were older.

We did however have talks with them about how lucky there were, how it would be a substantial house deposit and how, if they wasted it, we wouldn’t replace it (even though we do have decent savings ourselves). It is being drip fed into their S&S ISAs and they have no interest in blowing it. If anything it has helped their understanding of money and investments.

DD was the only under-18 beneficiary when the estate was distributed and although the solicitors were officially the trustees, they spoke to us and said that the cost of them managing just her pot for 2 yrs would be a waste of money, so suggested passing it into the control of myself and DH. Even their costs in the 7mths from distribution to handing money to us were a decent amount, goodness knows what their trust costs would have been!

Whilst I can understand why people say no way, I would also say that with discussion and involvement, getting money at 18 doesn’t have to be a disaster and can help with financial understanding.

Yes I would. I had that (well not 50k but a lump sum) from my grandparents, and our parents have set it up for our children. 18 is adult. Yes some adults have bad patches where they fritter money on stupid things, but there comes a point where you have to stop deciding things for them. They can vote, they can marry, they can have a child. A bit of money is nothing in terms of life changing decisions they can make at 18. If they fritter it they'll just have to find a way of earning their own.

With mine I had some say in how to invest from early teens, so it was something that had always been there not a sudden windfall.

Don't hide it from them though. Could lead to them inadvertently doing illegal things e.g. re income tax, NHS charges, thinking they don't have capital when they do.

I’d not allow this until 21
At that age I burned through a fair bit of money and it was wasted. She will regret it later. Better to keep it for a deposit or something useful
Having said that I would give them 5k to have a little bit of fun.

Of course not.

It depends so much on the child. I could not have been trusted with that money at 18 but my friend has two very sensible teenagers 18 year olds who could definitely be trusted. They are very frugal and save rather than spend their wages.
My 20 year old neice on the other hand lets money run through her hands like water and is always in debt.
I would set up the fund so they don’t automatically get it at 18 with a view to seeing what type of adult they are.

Christ on a bike no!

I think I would, and sort of prepare them from as young as possible to know it's money for uni or a house deposit. It's worth the chance.

But given what you say of the grandparents, first I'd make certain they've actually opened the account and put money in because thinking you have that money and then not having it would be awful.

No. Absolutely not. It would be earmarked for a deposit on their first flat/house, with a portion reserved for their first car. I’d give them a small portion of it to spend as an 18th birthday present, and another as a reward for their graduation or for their 21st birthday.

No way would I hand the whole thing over to them at 18. That way madness, and potentially a lot of anguish, lies.

Catkind that's a really good point actually. If some is in stocks and shares isa she can start to learn about that and help to manage it herself and watch it go up and down. That's a really good point, as well as having it always there it will be more normal for her.

With the cash side that can always be presented as her driving lessons, car insurance... Money and the stocks side as the more serious side for her future or any funding for work experience etc.

No way! My 16 yr old DD has no idea she has over £6k in the bank. Her money, but it's there to buy a car and insurance when she learns to drive. If she goes with friends on a shopping trip or whatever ill go to the bank to get some money for her but she’s no idea. And the other 2 younger that her have no idea neitherz

Duck it's been put into a account we opened up.

But some went in for two years, then nothing and now fil is talking like they want to put money in every year.

Anything is a bonus, but it's that control aspect.

I think we need more clarity on what they want to do and feels the money should be used for.

I probably wouldn't but it depends on the individual.

I put money every month into a savings account for DS. Not sure when I'll give it to him. It's nowhere near £50k but I'm a single mum, I don't earn loads and I'd be gutted if I gave it to him and he just pissed it away. It's years of hard work for me to save that.

I expect DC to still have tuition fee loans to repay themselves. A potential £50k+ pot is for maintenance/living costs which means that as parents, we won’t have to source from our income so not totally selfless. I saw the writing on the wall when student loans were introduced in the early 90’s when I was a student. I’m no expert so am not comfortable in giving financial advice to others. I draw my knowledge from years of reading the financial sections of the weekend papers plus some internet research.

Trust fund for most of it. With some to spend frivoulously (can't spell that!!)

With that sort of money, I'd put a smaller amount for 18, probably a few thousand, and the larger part for an older age or for certain circumstances in a way that it could be released earlier if I so desired. I'd want it safe and earning good interest for when they're more likely to really need it, but I wouldn't want to entirely unable or too penalized if life circumstances meant giving it sooner. Might even put a bit in a pension thing and let compound interest and such take it's course. I'm sure a good accountant, probably easy to get with that kind of money, could find a quite tax efficient and other ways of dealing with it.

As a side note, even though it was probably a joke, they wouldn't really need that much to bugger off and never come back if that's what they really wanted to do. That's more of a relationship and feeling safe, wanted, and that there are opportunities than a finance thing. I buggered off and never went back with what I'd barely scraped together and some finishing school gifts which ended up paying for a passport, a plane ticket, and a few hundred in cash. My spouse did it with less. My grandfather giving me a few thousand six months after in what was essentially my share of that side of the family's inheritance was very helpful in making those first few years easier; however, I would hold most of the money to be able to give them a better opportunity rather than thinking they won't be able to do things you may think foolish without - some are just reckless

“Unfortunately it doesn’t work like that, the financial institutions write direct to the child as they approach 18th and all parental access stops on their birthday. So you can’t just not tell them about it as some on here are saying, they will be told automatically by the bank or investment house.”

As Sophiesdog said, this. It can be even younger than 18 depending on the product. We’ve been paying into pensions for DC since they were born and when DS turned 16, the pension company wrote to DS saying all access was being switched to him. We still pay into it, but the company no longer shares any information about the pension with us.

So you need to be careful with the financial product and keeping it secret.

Discretionary Trusts funds aren't great for tax purposes compared to ISAs and have other fees, which is probably why the in-laws aren't interested in doing that. I think there's also tax liabilities for the trustees, from the brief conversation I had with a specialist when I was looking into for my DC and their inheritance from my mum.

I'm going down the route of stressing the sum they get isn't something that will be repeated until we're dead, so when it's gone it's gone. It has really opened my eyes and when I redo my will, I think I will limit potential future grandchildren to a token amount.

Following with interest and deep concern.
In laws have decided to cut dh and I out and leave all their worldly goods to ds. Hopefully that won’t be for a long long time but my great fear is that it might happen when ds is 18 or so.
He has SEN but is high functioning. He is vulnerable and impulsive.
Grandparents don’t understand the problem and Grandfather doesn’t really care anyway. We’ve tried so hard to reason with them that leaving this money to ds could actually ruin his life but are getting no where.
I don’t have any redress do I?
😢

We had ISAs for all our DC to cover University costs.

That is what they have all used it for. We made it pretty clear that there would not be anything more forthcoming if they blew it all on fast cars etc. Most 18 year olds are sensible.

Set up a disabled persons trust maybe, crusoe? Money can be left to the trust then