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?

Essentially, what it boils down to, is that you can't steal from your children.

OP, when you buy a house now, you have to prove where's the money for the deposit is coming from - equity from the sale of your old house, savings ( with copies of the account statements) or 'gifts' from others. The children's money would be classed as gifts. The mortgage lenders would require a legally produced letter showing exactly where that money came from including account statements as evidence. Putting that money into your account will not suffice as the bank will need to see where it came from. It's all about money laundering!
Sorry OP, but it's not happening!

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

This suggests to me that, you may not pay it back. You have thought about wether they will ever know or not.

It's quite easy, someone else may ask them about it.

Well yes our third dc wasn’t planned.

You won't be able to do it.

Why is a 45k deposit not enough? Is your income too small to fund the mortgage required?

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If this was a large sum of money that you would never be able to repay without selling the family home I would say no. But as it is £25k and you will save £300/month, I think it's fine. Buy the house, put the extra £300 into a savings account. In 14 years when your oldest is 18 this will be over £50k - more than enough to pay them back with interest. And they got to have a bigger, lovely and secure childhood home. Even if you only put £200/month into their savings account this will be £33.6k in 14 years. And you'd have an extra £100 month for family fun days/holidays/etc. If it's done legally through a solicitor I don't see the problem.

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..

Just repeating this op in case you missed it

There will be executors to the Will who won't be able to let you do that, as they would be sued personally by the dc when they are 18.

It would only be vaguely reasonable morally if the house was put in your dc names so you were investing the money for them. I’m not sure on legalities I’d this though.

I think potentially it would be okay, for example if you could save up the money to pay them back when they are of age. I would NEVER give an 18 year old a big chunk of money, as most likely it would not be spent responsibly. I would say 25 at the youngest! So for example if you borrowed the money to get on property ladder, you would not pay rent, but would you need to borrow a lot of money? For example if you currently pay 2,500 a month on rent, after you buy you might pay 1,500 a month or remortgage payments? So you could put rise 1,000 a month and by the time they are 25, if they are young (around 5 years old) you would have saved 240k for them. I know if it were my parents and I was given money at a young age, I would want them to use it to buy a house so their rent money can be used towards mortgage etc...provided that when I need to buy a house, I will be able to get the money back (by them saving the money etc). With that being said though, when we bought our house....we had a quite a big amount of savings for our kids already saved up (enough that it would have helped a little to use it), but we did not touch it, even though its under my name as well and its really just our money we put aside for them, and a few months later my dh made enough money that we could have put the money back straight away...anyway on principal we didn't use the money...bc we put it aside for them....

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

Just in case people actually believed you'd be paying back your kids THEIR money...

I know of family member doing the same sort of thing but I don’t know enough details to see how it’s even possible.

When I heard about it I was surprised that it’s being allowed as it seems to make a mockery of even having a will.
And yes, I am judging them.
Especially as they are still going on holidays and paying out for cosmetic dentistry, none of which is a necessity when you’re trying to buy a house

Whoever has the money holds it in trust for the beneficiaries.

This. A clever lawyer might come up with ways to "borrow" it or give a trust partial ownership of the property, but that could go badly wrong in many ways.

It would really be a poor thing to do to your children and a breach of trust with the person who left them the money.

When you say you'll save £300 a month, have you taken into account the extra bills that home ownership often brings, redecoration, new boiler, roof repairs etc?
Apart from the legalities and morality, you'd have to be very disciplined to save that money to repay your children.

It'd cost a lot in legal fees setting up trust etc. You'd loose some of the 25k to solicitors straight away. I think easier to save like mad, or buy a cheaper house with 45k deposit. Could you get a part time job?

RosieEffect and what if one of the many things that could happen, means the OP can not save that money.

Her dh could lose his job, her sick and not be able to work, an accident. Or the house could end up needing work in the next 14 years. A new boiler, decorating, damage to the roof etc. Another accidentally pregnancy?

Risking the kids money in the hope you would be able to save consistently, to have a spare £100 a month? I am sure the kids will be delighted they got the odd day out or the odd holiday, at their own expense when they are older, if the the OP ends up not being able to save it up again.

It's not the ops money to risk. No matter how small it is. The risk isnt hers to take. .
Which is why parents can not spend their kids inheritance.

I understand you're desperate to get a new house, but like many have already said you will be breaching the trust you have with your kids.

Not sure how it works, I think it all depends on how the money is kept but even if you can do it, its basically theft from the perspective of those who left them the money and, in the future, maybe even your kids.

What you should do is keep the money for them, or invest it for them! And no buying yourself a new house doesn't count as investing

Your poor kids. It is THEIR money. They are not old enough to consent. & like other posters have said, what if your dh loses his job? Theres illness or injury? You get divorced? You get made bankrupt or lose the house? Can you 100% guarantee the children will get their money in those scenarios?

Honestly even if it is legal to do such a thing, morally it's just not ok. People would not be 'jealous' but be prepared for people to judge you for it & rightly so

Is the OP 'stealing' it or 'investing' it? Many people invest in property instead of pension. As long as the increase in value as a % of the investment is returned to the children when they are of age what's the problem?

I'm surprised that your own moral compass would even think about using your children's inheritance for your own purpose.

The money was left to your children, not to you and your husband. You can't make the decision on how to spend/use the money.

Too bad that you can't afford a 3 bedroom house but you still can't use someone's inheritance to fund a deposit. That is stealing.

It would be theft. It's illegal. And repeat ad infinitum.

I would NEVER give an 18 year old a big chunk of money, as most likely it would not be spent responsibly.

Bloody right they won't they'll see things very differntly once their say 25 odd onwards.

It does seem to me that there may well be a way to do what you want but the solicitrs advice beckons. I'm sure you can write some sort of agrement so that they do get thier money back when their a bit older I mean you could just chuk it into any old deposit accoiunt paying sod all intrest here it can appricate in value.

Quite how you do it needs perhaps better advice than that found here but it seems to me its a good idea and No, your not stealing from the children!

Stealing and theft have to have an element of depriving them permantly of their bunce!

Furthermore if they have any sense they'll see it as a very good idea property investment has done me and the children who will get their share in the future well indeed:)

I would NEVER give an 18 year old a big chunk of money, as most likely it would not be spent responsibly.

Legally you can't keep it from them.

dd got a lot of money on her 18th - about 25k. She hasn't spent any of it yet. She's going to wait until she finishes uni she says and use it for a house deposit.

Marmablade putting it in a house in the ops and her husbands name.....is theft. Not investment.

The OP has no way of knowing if she can ever pay it back as she can not predict the future.

So it's not investment. Chances are the kids wont see this money again.