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?

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.

I think people will find it deeply distasteful but they certainly won't be envious you took your own kids money Like this.

However it seems clear the pair of you are going to do it so I'm not sure of why you're asking. Or why you're blaming your husband, you seem as keen on raiding rheir piggy banks as he does.

@Wanttobeontheladder honestly you need to ignore everything everyone has said on here and only listen to real life qualified solicitors.

MN is full of half-baked, dubious, and outright incorrect legal advice; don't ever take anything you read on here as gospel unless it's coming from a known legal expert.

If they carry on renting and are never able to buy the ops DC won't inherit anything on their death.

If the op uses a small sum of their inheritance to buy a property they'll get the money back tenfold. It's a no brainer. 💁

After all, when you die the property will become there's. And will give them a good foundation and.security when they need it most.

This is an extremely salient point. You're actually creating assets for them after you die this way, which spunking money on rent isn't doing. They end up with 10K or so each at 18 but nothing on your death as things are, versus the same amount plus inheritance from you if you have an estate to leave them.

Also, I wouldn't name the children as owners on a property because you'll fuck up their chances of any first time buyer deals/offers/benefits that may be available then.

Well they won’t be able to do this anyway, as there will be a mortgage on the property. You have to be 18 to be named on a mortgage, and it isn’t the case that the DC could own e.g. 8% (or 2/3% each) of the house and then the parents get a mortgage for the rest.

If it was a cash purchase, then the DC could own part of it, but this won’t be a cash purchase.

People don't think badly on you for this because it's the 'easy' way and they're jealous... it's the fact it's just a morally bankrupt thing to do. Absolutely awful.

All these people getting nutty about this: you know the DC will be living in the house, yes? It's not like the OP is thinking of blowing the lot on a boob job or a couples'only trip to the Maldives.

She has YEARS to pay it back. I'm pretty sure her DC would enjoy growing up in a decent-sized house AND being handed a cheque for £10k when they're 18 or so.

Thanks, NoSquirrels for explaining it's not as easy as I thought it was - 😃- but ethically, morally, I don't see the harm.

After all, when you die the property will become there's.

Why should they wait until OP dies for something that was given to them before they even turned 4

being handed a cheque for £10k each, £10k each

Ok
Children cannot own a house, that's illegal so cannot happen
Any money they are gifted has to go in a trust, I doubt the trustees would allow this.
What if you or your husband died? Got divorced? Became very disabled?
How would you repay this money for each child on majority?
What if there was no equity in the home on majority?
As all children are currently under 4 years , that would mean finding several large lump sums in a 3 year period. Also think of the interest and compound interest they would lose in your scheme.
It's all quite a bad idea.

I never understand when people have kids then say they can't afford to live. How are you coping living in 3 bed with 5 people? That's a nightmare situation! If I were you I would be seriously reconsidering where I lived and move to a cheaper part of the country. Plenty of places out there where 45k is a plenty big enough deposit for a 4 bed

After all, when you die the property will become there's

Unless one of them goes into care and the house is sold to fund it. Unless something happens to one of them and the other can't afford it and they need to sell it. Unless they split up and need to sell when there is no or negative equity.

Unless, unless, unless.

Lampshine - we live in a small 2 bed terrace. No parking. No separate place for dining.

We are only planning on buying a 3 bed just so 2 can share and one has their own room rather than all three in together like now

"After all, when you die the property will become theirs"

Not if the parents need longterm care in a facility and have to sell the home to pay for it, it won't.

If it can be done legally, it seems a good idea, and property is a reasonably safe investment. But if you're going to do this:

Let's say the house costs £100K - £45K of yours, 25K of the kids' and 30K mortgage.

You would own 74.8%, and each child would own 8.4%.

You would pay the mortgage, as that's part of your share, and every month each child would receive 8.4% of a fair rent for the property, paid by you. That seems fair.

When the house needs insurance, repairs or maintenance (not redecorating) you could use their saved rent money to pay their share of the bill, so for a £100 repair bill, each child would pay £8.40 towards it.

When the first child reaches 18, you sell the house, whether you want to or not, and divvy up the money.

I think this would be fair to them, and a sensible use of the money, but it would need to be overseen by a solicitor (paid by you, since you and DH are the ones who benefit from this interest-free loan) and each child would need a charge on the house for their share.

Frankly, I wouldn't do it. It sounds far too complicated!

exactly Quim.

10k is.sod all. It isn't even a house deposit these days.

Whereas 125k or whatever in their 40s when they're already building their lives will be.lifechanging.

Why on earth did you have three children when you can’t live where you live and can’t afford to move?

The mind boggles!

And now the answer to use your children’s money to sort out the mess you’ve both made.

OP it isn't your money or your husband’s either. You both should hang your heads in shame for even considering stealing your children’s inheritence in this way. That is what this is - theft. It is unfair on the children and unfair on the person who left the money to them. Where the fuck is your moral compass here? We’d all like a bigger house, a nicer car, a bit more spending money. But stealing to achieve that? Erm, no.

Why should they wait until OP dies for something that was given to them before they even turned 4

They won't be - OP is (I hope) proposing to replace the original inheritance so they get everything they would if she left things as they stand, and they will benefit from the property investment.

Unless, unless, unless

All of that could happen, but it's far from inevitable, and I think a reasonable risk. If the OP is serious about replcing the inheritance + interest, then all this does is potentially improve the financial outcome for the children in the long term.

*Why on earth did you have three children when you can’t live where you live and can’t afford to move?

The mind boggles!

And now the answer to use your children’s money to sort out the mess you’ve both made.*

This! Given your track record of managing finances (e.g not v well) I'd be skeptical about whether you can pay them back too.

That was in response to the post that suggested it was ok because the children would get the house when OP dies.

Sorry post was for @QuimReaper

I’d do it.

First of all I’d see a solicitor to see if it can be ringfenced. So when all children are 18 the house is sold or you buy them out.

But overall if you’re sensible with money buying should mean over the next 15- 18 years you will be able to pay them back + interest from rent saved.

Make a fixed saving plan so each will have a fund on reaching 18z

After all, when you die the property will become theirs

So the DC could be 60 by the time they inherit, which won't help them get a foot up in life.

If this is even legal - which I would question - the cash needs to be released to the children when they come of age. Not tied up in a house, not to be inherited on death of the parents.

They're not 'stealing' it FFS, they're wanting to borrow it while the DC don't need it and can't use it anyway for extremely sound financial reasons which will almost certainly pay off many times over from the money saved in rent alone while at the same time benefiting DC from more secure and spacious housing.