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?

You can justify it to yourself all you want but it's not your money and no matter how much you think it might life better to do this you have no right to and just shouldn't

I think if you do this to benefit the kids then get a lawyer to draw up a water tight contract to ensure you pay them back, by the time they are 18 either by guaranteeing to sell up or by paying a set amount into an account only they can access, every month until it is paid back.

Rents can be higher than a mortgage and life will get easier when childcare reduces and the parents get future promotion.

If the parents pay rent, they will be no better off and wont be able to save anything. The move only makes them £300 better off.

The OP is a sahm, so no childcare costs and when she eventually returns it's a low wage. Assuming she goes back full time.

The parents can save to repay the kids, take equity out of the house, or sell and downsize to repay the kids. (Giving the kids a pro rats share in the increase in price).

They probably cant. They are not saving enough to pay rent and save the money to pay the kids back. There no guarantee they will be able to downsize. Lots of things stop people being able to remortgage or downsize. Or even save. Theres been tons of reasons given that the kids wont get access to the money.

I made good money for my Dc, putting it into a house then reading it with the % increase in value when we moved from an experienced dive area to a cheaper area.

So you did it? You invested your kids money and it paid off. Great. Still not the ops money to risk.

Theres no guarantee of parents getting a promotion or house prices going up anymore.

Morally its wrong to use it, remember it was left to your children should they want to buy their first car or help with university fees.

You cannot use money that was not meant for you its wrong on so many levels.

Brexit is coming - no way will anything in the UK go up in value

And if your plan goes wrong and you cannot pay it back? Will you just not tell them that you've spent their inheritance and have also prevented them from gaining interest? There have been several threads on here where OP's have found that their parents just spend their inheritances. None of them ended well for their relationships.

Frankly it's a terrible idea and will lead to resentment from your children if you can't pay it back.

It isn't yours. If it was yours then it would have been left to you.

Why do people keep saying 'it's illegal, ' ' no you can't do that' 'it's stealing'

None of you have the slightest idea how the trust is held. (If it is even in a trust !) . All trusts are different. is it a Bare trust, restrictive or discretionary ? Who are the trustees ? and would they support this use of the money in order to provide the children with a better lifestyle. ?

But as usual the MN massive get there knickers in a twist at the idea of someone having a slightly easier life. ! I would be interested to know how many of those screaming 'thief' are also currently renting and desperate to improve their families future prospects. I bet very few - more likely to be people who already own their home ...

Before you put your judgy pants on, do yourselves a favour and have a bit of a read up on the law related to trusts and trustees (Underhill &Hay 19th edition is best for this) and then when armed with some facts rather than a patronising moral judgement , perhaps your point will have more validity.

smallereveryday maybe you need to read the thread where people have already been through those points.

Mainly centering on the ops assertion that the kids will never know if she doesnt tell them. That sound above board to you?

@smallereveryday given a large number here have said "it depends on the trust" and commented that it's not impossible but would have to be done right and with legal safeguards so the children retained ownership, I think you should stop being so bloody patronising

My law degree serves me just fine to understand the fundamentals thank you

Then I obviously wasn't referring to you then !!!

I was referring to all those adamant that this can't be done.

Deadposhtory. If the house has to be sold to fund your care in later life, there may not be any inheritance left for your child (children). Have you considered that? Have they?

As for not telling them. I see absolutely no need to tell them. They are very very young. They wouldn't understand and it is not relevant to them. Telling kids they are due a large sum of money creates its own problems with poor money management, entitlement and bragging to friends. Of course kits a bad idea .

The time to tell them is probably six months before the trust is due to pay out. In order to give them time to absorb the news.

smallereveryday so you havent read the thread.

She mentioned they would never find out unless they choose to tell them.

And how exactly is the trust paying out, when the money is in the house.

Most people have said it can be done. But shouldnt. Because the opbhas no way of knowing if her and her dh can pay it back or will be able to remortgage/downsize etc..

As I said, if you read the thread you would see why people think its a bad idea.

And yes, taking the money and putting it in the house while planning on hiding it from the kids, is theft. Theft is permenetaly depriving. OP and her dh have considered permentaly depriving them.

As for learning a large sum of money will create poor money management. It wont its approx 8k per child. Not enough to even buy a house, so its doubtful it would impact this. Their parents need to teach them good money management. Like any parent should.

I remember my parents using mine and my brothers inheritance to pay off a mortgage, then where they sold the propertwe got the inheritance back + extra... So it must be possible...

There are so many variables here;

What happens if you go bankrupt and lose the house?

What happens if you get a bad credit rating and can't release the equity when your dc get to the 'age'?

What happens if house prices go down?

Will you given them a 5th of all equity you make on the house?

I'm sorry, I wouldn't do it. Your housing situation is YOUR responsibility and not your DC. Your friends are highly unlikely to say anything negative to your face.

I find it very distasteful tbh.

A friend of mine is married to someone this happened to.

His Mum died when he was a young boy, and unbeknown to him she had left him a sizeable chunk of money. His Dad, took that money and spent it all. He didn't find this out until he was in his 20s. He was obviously distraught and ended up going NC with his Dad. He never spoke to him again, he never got to meet his 2 grandchildren and died without speaking to his DS ever again.

Be very careful OP.

The STEP (society for trust and estate practitioners) provisions allow it...

"This power is also useful where a property is to be purchased for a minor beneficiary to live in with their guardian(s). The trustee is able to use money from the estate to put towards the purchase of property which would then be jointly owned with the guardian".

Money from the trust can also be used to advance money for the child's maintenance and upkeep. Using the money to provide holidays, extra-curricular activities, school clothes or trips etc. 8k per child wouldn't go far if you chose to use the money for those purposes.

The trustees should use the monies in the best interest of the children. Allowing the children to have a larger, stable family home and to receive the original sum with interests is undoubtedly more in the interests of the children than putting it away in NS&I for 14 years when interest rates are lower than inflation. The OP isn't considering anything that is illegal or immoral.

Theyellowsquare wxcwor the bit where she is considering having it so the never find out.

Or has a plan about how they will get the money plus interest back

wxcwor that word was meant to be except

Your parents were idiots for skipping generations.

You would be worse, thieves, for taking this money.

If the house has to be sold to fund your care in later life, there may not be any inheritance left for your child (children)

The house would only need to be sold if both parents need care and what's the odds of that happening in the next 15 years, before they are 50/60? OK they could have an accident or become ill, but they could also insure against those risks. And you only have to pay for care until about £23k is left, so if the worst happens, there's nearly all the DCs money right there.

Yes, the skipping generations things is very odd and misguided. Obviously the grandparents wanted to help their grandchildren, but in this family's circumstances, this would have been best done by the parents using the interitence to buy a home now, rather than have it sit rather uselessly in the bank for the next 15 years.

BarbaraofSevillle except the OP doesnt have a plan on how she is going to pay the kids the money back. The money she will save in rent, is likely to be eaten up.

So the options are

OP selling and down sizing or remortgaging. Neither of which, are guaranteed to be able to happen.

Assuming the op and her dh dont suffer with ill health or never having anything go wrong which means they lose the house. The options for the kids would be to force the house sale or wait for their inheritance. No one is saying both would need care in the next 15 years. The care situation was in response to the point the kids would eventually get it when the OP and her dh dies. Which, if the kids are forced to wait until then, care fees are a real possibility.

23k is less than their share. So the argument of a sound investment wouldnt stack up then either. That's not a sound investment at all. Waiting 30 years and getting less. And the money is theirs, they shouldnt have to wait until their parents die. That would be the equivalent of changing the will and leaving the money to the parents and them, in turn, leaving it to their kids.

My parents did this, I can't remember exactly how old I was but they explained they needed the money DSis and I had been left when a relative died to be able to buy a house rather than always having to rent and we both signed something. They used it to buy a family home, they weren't exactly frittering it away so it wouldn't occur to me to resent that or think they had done something wrong. I got my own bedroom rather than having to share so I was happy.

DSis and I did inherit after they died but if we hadn't I really wouldn't have been thinking "where's my money". I had totally forgotten about it until read this. Aren't families supposed to stick together?

Aren't families supposed to stick together?

Whats sticking together?

Accepting that another family member has left your children money and respected that?

Ensuring the children have access to the money that is theirs?

Not hiding it from the kids?

Theres lots if ways for families to stick together. Surely?

Maybe the grandparents had a fair idea of the parents were like l, and that's why they skipped a generation and decided that the GC better deserved the money.