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?

Eh...you chose to have 3 children when you can't afford to house them. Don't use their money to fix your mistake.

The solicitor we saw said we could with I guess the use of a trust but I am not 100% clear on the details of how it all works at the moment

If you'd seen a solicitor you'd not be that clueless.

With 3 young children it’s more than a squeeze

That's on you not them. You made your lifestyle choices. It's your job to provide for them, not them to provide for you because you can't afford your own choices.

Yes I would OP, no question as it benefits the children.

It doesn’t benefit the children.

it saves you money at the moment because interest rates are low. if they were 15% it would cost you more than rent

well, I think you could, if the house was then in the name of the children.

When were they expected to inherit it? By that I mean that were they to have it as a gift on their 18 birthday?
Because you need to be able to give it to them at that point.

If the mortgage is lower than the rent, can you save to return the money over that period?

If the house does go into their names, how will you manage the increase value of the house? Because it should be 100% theirs (like the interest they would have accumulated) .

We have been saving up for a house deposit and due to previous inheritance directly to me we have £45k saved.
This additional inheritance to our children is £25k.

How would you then afford to repay the money into the trust for your children to receive? If you were to "borrow" from the trust you wouldd have to ensure that it was intact by the age the children would inherit it.

It sounds illegal tbh.

Would the house include the share in your children’s names that was bought with their inheritance?

Could you also put the £300 a month you will be saving in a fund for the children?

This way you all get a bigger house and you start building equity in a house and your children get a percentage of an asset plus a savings fund of £300 a month

It seems a very sensible way of investing their money but surely the money was left to them in trust? What’s to stop them spending it on sweets????

If buying a house is so important to you, you should have prioritised that over having 3 kids and giving up work.

You can't use the inheritance. It is simply not yours.

It's not your money. You chose to have 3 kids on one income and overcrowd your home. That was your choice. Don't steak your kids money because honestly, the sort of people who do that are the sort of people simply wouldn't tell their kids and keep the money all their lives.

Personally i wouldn't as it's their money, but if you do be prepared to re mortgage when they come of the age to receive their share so you can pay them back (16/18yrs?)

I wouldn’t. The children could in essence force you out of your hole once you are older. It could lead to a lot of resentment. Personally I would do as a PP poster suggested and whack it in a high interest account and leave it there.

• home

What are you going to do when interest rates rise? It's £300 a month now, when they are on the floor - but looking at global markets, and the fact we're overdue a recession, I wouldn't be counting on this being the status quo for the next 14 years...

I believe you could purchase a property, the property becomes a trust asset and the owners of the trust are your children.
Not that I would do this.
How would you decide when to pay the funds out? Who would be the trustees? Who would do the annual tax return? How would you ever be able to calculate the loss of interest on that money? It’s too complicated. And you are wide open to the criticism being posted here.
I agree with the advice to leave the money in a high interest account and forget about it. For you to buy a house was clearly never the intention of the person who left the money.

If they'd wanted to leave the money to you they would have done. They didn't. It's not your money.

Yabu. And entitled.

Why don’t you get a job instead? The money is not yours. With Brexit we have no idea what the property market will do.

Use your £45k to get on the property ladder (where do you live is this is not enough?!)

Invest the kids £25k within a trust so that they can use it to get on their own property ladder when the time comes

Use the £45k ffs and don’t steal your children’s money!

You need to get clear on the details, then.

Because as PPs have pointed out, you will need a clear end-game plan of when and how the family home is sold to give your DC back their inheritance at a fixed point in time.

At that point, you and your DH would have to buy somewhere else to live. Would you still qualify for a mortgage then, if you needed one? Or would the mortgage be all paid off by that point and your share of the equity allow you to buy somewhere smaller outright?

You need to think it all through properly and really understand all the pros and cons for the long-term not just the near future.

I was the child in this scenario 30 years ago OP. My grandfather left his money equally between all of his grandchildren. Long story but instigated by his new partner who disliked all his children. My brother and I were perhaps 12 and 9. I vaguely knew, my brother was too young.

Long story short, they used it as a deposit at a time when we were in desperate need of housing. It gave us a permanent, secure base where we couldn't be turned out by a landlord, and freed up money for the rest of our childhood. We had holidays, proper christmases, decent clothes and a good quality of life.

I absolutely 100% don't resent it and am glad they did it. My brother is an entitled money grabbing gimp, and he does resent it, but has been gifted far more than the initial sum in adulthood. It's just an excuse for him.

If you've saved £45k now, I'd use it but be saving madly to get the £25k back and ready, and be prepared to sell up if you cannot replace it by the time they are 18.

Thank you

DH is pretty set on doing this and I wanted to hear other people’s point of view who don’t know us as family and close friends agree with us (to our faces) but are obviously or most probably all thinking the same as you all are behind our backs

I had thought there might be examples of others doing the same but clearly not

I can imagine there could be some jealousy from people who have worked hard to get on the property ladder that if we do it this way we’ve had it easy maybe.

Once children are older I will go back to work part time but I used to work in a nursery so not huge earning potential for me.
DH works extra when he can for overtime but can’t do much more than that