Using child’s inheritance to get on property ladder

[Wanttobeontheladder]

We are in our late 30’s with 3 children and have been renting all our adult lives

We are desperate to get on the property ladder but I am SAHP and DH is sole earner.

After the loss of a parent recently there is a considerable inheritance that was left directly between our children rather than coming to us.

Using this money would mean we could finally get on the property ladder (just)

Seeing as the children benefit too we feel that we should use it.

Would we be unreasonable to consider this?

@Wanttobeontheladder not only completely unreasonable, totally unethical!!

It’s not your money!

How old are your children? If school age or will be soon maybe get a job and start saving!

We have it written into our Will that if our DD's guardian needs money towards different accommodation, money can be released from our estate if it benefits our DD (providing Executors agree). We did this as one of her guardians struggles financially and there is no spare bedroom space, so realistically they could only have DD is they moved/extended. Guess it depends what's in the Will. If not, take legally advice - could purchase of a property with their money is seen as an investment, but on them all reaching 18, property would need to be sold and given to them.

I'd do it, a secure family home over a rented property has to benefit the family in the long term.

Treat it as a loan, put £100 per month into each child's premium bonds until you've paid it back with interest. (Who knows they might win £1m and £25k will seem like nothing!)

Interest rates are terrible at the moment, to see any growth you would need to invest in the stock market which is risky and they will potentially lose money.

Are you and your oh the trustees op? Or is it someone else? AFAIK, having been a trustee myself, you have a legal obligation to uphold the terms of the trust. So if the trust says the money has to be given to them when they are 18, or whatever, that is what you, or whoever is the trustee, is obliged to do. I somehow doubt that the trust specifies that you can effectively close the trust, withdraw the money and spend it on a house. If the money is not in a trust,; why isn't it protected in this way?
If you went to a mortgage provider and said that a portion of your deposit was coming from your children's trust, they would want to see the trust details, to see if you are allowed to do that.
If the money is not in trust, I can't see that it is protected, but I think taking it would be morally wrong.

I'm pretty sure that's illegal!

If the money is theirs you can't just take it and spend it, whether on a house or magic beans. Or would the house be owned by them? You would still need to consult s lawyer, due to the risk of a property crash wiping out their inheritance.

The average person only has limited childhood memories after the age of 9.

Not sure they'd be happy to reach 18 and wonder where their £8k inheritance was:

"Oh yeah, we spunked it all #makingmemories by taking you to the sealife centre and the soft play. No inheritance/wedding funds/university money for you, sorry!"

3 children and 2 adults in a 2 bedroom sounds miserable to me.

I'd much rather have a fun childhood.

I'm not sure if you are being deliberately obtuse or if you genuinely don't understand.

Anyway 'fun v misery' isn't based on your accommodation.

The fact that you think it's ok to work your way through your child's inheritance for days out shows you to be a certain type of person. It's not something to be proud of.

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No. YABU. It's not your money. If you use it, it's theft.

Go back to work and save more. Or move somewhere cheaper so your 45k is enough.

The entitled attitude of some people makes my teeth itch. The money would help but it isn't your money.

Honestly I inhereted money when I turned 18.My parents company failed and I was young and stupid and an idea came up about getting the money early if I helped finish building their house.
Also terms were to get the money back by whatever way the mortgage was done.
I believed it...
But the house is built I want to start a business can't until I get a decent job and save up to get a loan.
My other family members said don't lend the money but I did...

That money is their future.

Not sure it's legal but if it is the kids should own the percentage of the house their proportion of the deposit equates to eg if the house was £200k and each child contributes £10k they own 5% each.

You can buy the house but the property has to be entirely in the children’s names.

I can’t see how they can find out about it otherwise though

Presumably the inheritance is stated in their grandparent's will - a will is a public document and any of your kids can request a copy of it when older, especially if they hear from other relatives about an inheritance that they were left.

Do you know who the executor/trustee is/are? They will have a responsibility to look after the money until your DC can inherit.

My kids inherited money a while ago, DD was under 18, we were asked to manage it instead of the solicitor, who was the original trustee. Slightly different as she was almost 16 and had a say in us taking over the money! But the solicitor did speak at length to us about our responsibility to her.

I would say it would be a good investment with their money. The house would have to be in their name though and the difficultly will come if your children don't get on as adults or it could cause division if one (adult) child wanted to sell to gain access to their money or wanted to live in the property. They could always mortgage for half the property and buy the other sibling out.

It’s a legal issue. There will be trustees assigned to look after the trust - usually a lawyer and someone like yourself. £25k is actually not that much money and administering it will use up part of it, so I’m surprised your lawyer didn’t suggest dissolving it and putting the money into junior ISAs or similar. It rather depends on how the trust was set up. It’s seems too small an amount for the complications that will arise if you were to borrow from the trust. The children will reach 18 at different ages too.

OP your solicitor is correct re a trust. Your children’s inheritance would be protected and would be a good investment for them. There are few safe investments (trustee approved) which provide a decent interest rate anyway. By the time you need to distribute the money to your children you will have paid off a sizeable chunk of the mortgage and will have equity in the property sufficient for you to get (a smaller) mortgage with which to cover the balance owing on the original mortgage and the money plus interest owing to your children. Meanwhile your children will have had a more comfortable upbringing. No point in putting the money in the bank at a safe but low interest rate so the bank can earn money on it lending it out on mortgage to other people.

Surely if the money was left to your children in a Will then it has to go into a trust? I had a sum left to me when I was a child and my parents couldn't have used it even if they'd wanted to. I didn't have access to it until I was 25, which in hindsight I'm very glad about as God knows what rubbish I'd have spent it on aged 18! But the point is, legally my parents did not have access to spent it as they wished.

i can now see why OP’s parents didn’t leave them the money. I wouldn’t either if I had kids willing to disadvantage their own kids to get on the property ladder.

I get the feeling that you're going to do it, if you're able.
And then you'll keep quiet. Only sell up to release their money when it suits you.
If I knew you personally, I wouldn't be jealous of you but I would be judging you.

After all, when you die the property will become theirs

An absurd statement. My grandmother is turning 97 this year, my mother and her siblings are in their 70s. My grandmother was very wealthy, used to own a very valuable house, a holiday home etc - but everything's been sold and now all her money has been spent on care and my mother and her siblings pay out of their own pockets for her nursing home and other costs. Even if there were a house to sell now, my mother is in her 70s. The children in this scenario cannot hold on to some faint hope that 'one day' they might inherit a house.

OP you are proposing to steal from your children, who are under 4 years old. Any trustee and solicitor who facilitates such a theft is in my mind acting unethically, if not illegally. It is your children's money, not yours. You have already received an inheritance, which is more than most people get. There is no guarantee that you will ever repay them, regardless of whether you agree to do this on paper. If you set aside money to repay them, you'll see that money sitting there and think 'the house needs repairs/renovations, or we all need a holiday, or whatever - well the kids will benefit from that so it's ok spending their money on it' etc. The kids will never want to turf you out of house or sue you, so you'll just never pay them back.

Relying on your previous inheritance and your children's inheritances to fund your housing is no way to manage your finances and your living arrangements. I would suggest other routes such as help to buy schemes, moving further out, buying a flat rather than a house etc. Even perhaps consider you and your DH sleeping on a sofa-bed in the lounge to free up a bedroom as the kids get older? (My sister can only afford a one-bed flat so when her kids are with her she sleeps in a sleeping bag on the kitchen floor, they get the bedroom and sofa-bed.)

A solicitor won’t faciliate this, and OP will be asked where the money came from and be asked to present the will and probate to the mortgage lender who will refuse it as the money is stolen.

What happens when they want to buy a house? Really not fair at all

but it's far from inevitable, and I think a reasonable risk.

Its not a reasonable risk at all.

Property may not go up in 14 years and op and her dh may not be able to remortgage in 14 years.

Besides which they can not kegal take any risk with money that isnt theirs.

It doesnt matter how small the risk is, it's not the ops money to risk and the children can not make a decision about wether they want to risk it or not.

People can tie themseleves in knots all they want trying to justify this.

It comes down, it's not the ops or the DHS money. It's not theirs to risk, no matter how small a risk it is.

"It's common sense if you live in a 2 bed house, don't have 3 kids. I have 1 child and won't be having any more until I'm in a stable position to do so."

Well let's hope that you never ever have an accident or move into a shiny new home in preparation for your second born, only to find out that actually you're having twins... or that one day you don't ever need to take on responsibility for another persons child... or you lose a job and have to downsize to a 1 bed flat or face homelessness... or end up in a refuge and then are accommodated wherever the council can put you... or end up having to live with family after fleeing violence...

You have NO clue as to why the OP is in the housing situation she is in, so piss off with your judgey holier-than-thou attitude.

You can’t just take the money and spend it. It isn’t yours. You’d have to set up a complicated legal agreement to borrow it from the children and repay it with interest. Which isn’t necessarily a bad thing. But it sounds like you think you can just take it?