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?

So long as you are definitely going to be saving the money to ensure that they've been paid back with a good rate of interest by the time they're 18, I'd go for it. It sounds like having 3 bedrooms will be a benefit to them, especially thinking about when they're a bit older. No idea about the legal side of it, but I'd want to make sure that their inheritance is properly protected.

@HavelockVetinari that's not what the op implies when they said the kids would never know. The implication is that they are just going to try and use the money without anything protecting it and retaining the benefit for the children.

Havelock

What the OP spends it on is irrelevant.

It’s not her money to spend.

Oh, and property is a much better investment than an ISA

That's purely speculative and ignores the fact that it's not the parents money to spend or invest in their names.

And aargh, stop accusing OP of stealing!! The money will be exchanged for part ownership of a house, not pissed up the wall of the local pub!

That's not the point, and not how it is viewed by the law.

What matters is not being a cunt

Then don't be one, justanswerthephone

As a pp said, a secure home where the kids didn't risk being moved on by the landlord at anytime would be good for the DC. More space and being able to decorate how they like - maybe get a dog! Worth more than a few grand sat in a Junior ISA.

By the time your DC are adults you'll be working and could remortgate to release their "inheritance".

You can guarantee they will be able to get a remortgage?

What are the choices of the kids then. Force the sale there family home, sue their parents or just live with it?

After all they might get it when they die. Might not. But, hey, it's not like it's their money......oh wait! It is.

And aargh, stop accusing OP of stealing!! The money will be exchanged for part ownership of a house, not pissed up the wall of the local pub!.

They cant choose wether they want to put it into a house or not. Also the running of that house has nothing to do with them.

The OP could find herself not able to pay the mortgage or remortgage for lots of reasons, meaning the kids will never see it.

It is not the ops money to actually risk.

FleetwoodStorms and what if they never see the actual money that is theirs?

When they are older and find out, you expect them to be grateful they financed this? Instead of the parents financing it?

So long as you are definitely going to be saving the money to ensure that they've been paid back with a good rate of interest by the time they're 18, I'd go for it. It sounds like having 3 bedrooms will be a benefit to them, especially thinking about when they're a bit older.

The problem is that the old cant guarantee she can save that. No one can.

And as for her comment of 'they will never know unless we tell them' sounds like she thinks it's a get out clause if they cant.

OP, I'd do it in a heartbeat if it was me. Living in unsecure rented accommodation where your kids can't put posters on their walls, or you can't paint it the colour you like, and you could be made homeless and have to find a new house for three kids under 4 on just two months notice is no way for your kids to live (and I say this as someone else stuck in the same situation).

8K per child that they can't even access for 15 years, and is going to earn a pathetic amount of interest,

Or

A bigger house, more bedrooms, more space, more money for holidays, less stressed and happier parents.

Hands down the second one is in the children's best interests. If your solicitor can make it work, do it.

No that's theft.

As a pp said, a secure home where the kids didn't risk being moved on by the landlord at anytime would be good for the DC.

Not anyone’s decision to make apart from the rightful inheritors.

I would certainly get legal advice and seriously think about doing it ... but putting in place a plan to save the money with interest (£300 per month x 12 months = £3,600 per year × 8 years is £28,800)

The advantage to the children is a stable home, more room, they still get inheritance money at 18 ... and possibly even a bigger inheritance from you in future too.

Seems logical to me, if done right.

If done wrong... it would just be stealing!!

There's one post in which it seems as if it's 25k per chikd; is this correct?

But they won't be financing it, will they? It's not money the DC have actually earned. It's a few grand left to them by someone they sadly won't remember. And it's just a small percentage of what OP will be spending paying for the house.

Seems logical to me, if done right.

If done wrong... it would just be stealing!!

No, it’s stealing whatever the outcome.

But they won't be financing it, will they? It's not money the DC have actually earned.

This is so sad.

Financing - to provide funding for.

There is no allowance In that definition for whether the money is earned or not. How absolutely bizarre:

I would but legally so the DC would have the money invested in that house with a guaranteed return. It would have to be well thought and yes be prepared to move out and sell as the youngest hits 18/21...

I guess it would be like shared ownership renting the DC share and a mortgage for your own share.

But they won't be financing it, will they? It's not money the DC have actually earned. It's a few grand left to them by someone they sadly won't remember. And it's just a small percentage of what OP will be spending paying for the house

Of course they are financing it.

Financing something isnt only using money you earned.

The rest of the ops deposit is inheritance so, is she not financing her own house at all.

Where the money comes from has nothing to do with wether its financing or not. The money belongs to the kids. Therefore, they are financing it.

I would but legally so the DC would have the money invested in that house with a guaranteed return. It would have to be well thought and yes be prepared to move out and sell as the youngest hits 18/21...

This is the issue. There is no guarantee.

The housing market could crash. Ops Dh could find himself put of work, or get I'll. Or simply refuse to sell. They could find themseleves unable to remortgage. Or get divorced.

Or if they sold, not be able to afford somewhere else to live.

Investing results in some risk. Since the kids are old enough to consent to risking their own money.

It's not what you asked but have you looked at buying a new build and using the help to buy equity loan? That would probably bridge your deposit gap.

I'd do it to get out of private renting. Private renting is really hard on kids, IMO, unless you are quite rich.

Once you have used their inheritance you should get trained to do a job that pays more than a nursery worker. I suspect the children were left the inheritance because their grandparents thought you wouldn’t have anything for them when they turned 18.

Nope. And the size of your current house is irrelevent - you chose to have 3 kids in a 2 bedroom rental before this relative died, so were obviously OK with it before. What if they want to use it for travelling the world when they're 18? I'd expect my 8k with interest if I was them at that point.

Have you spoken to a mortgage broker? We were pleasantly surprised by the amount we could borrow.

I think that as long as it is in a trust fund and invested correctly and you can repay it then it is an option to consider. I would want to investigate whether this would then prevent them benefiting from being a first time buyer. For all those who couldn't conceive of this - what do you think would happen if the money was say put into a building society savings account? It would be used to lend to other people for their mortgages. At least this way the children would benefit from the money and from living in a bigger house.