At what age would you tell your child they have an inheritance

[BokehBabe]

Said child currently in year 9.

Now?
After gcses?
After a levels?

Why keep it a secret?
Surely the most important thing is to teach a child about financial management and for them to be involved in where the money is invested etc.
My dd is 15 and has 30k in savings and we discuss with her what she wants to do with it eg interest rates and returns, ISAs, trackers etc.

I would say in their 20s but I guess they’ll have to know at 18 as that’s when they’ll get it?

We were in a similar situation when DS was 14. He inherited £30,000 from my dad. We told him as soon as we were aware (it came as a surprise as I was estranged from my dad). We gave him £1,000 straightaway to buy a gaming computer he had wanted and put the rest away until he was 18 but always stressed to him that he was to use it for something like a house deposit.

When he became 18 and about to go to Uni we discussed with him what he wanted to do with the money and he ended up buying a flat (DH had to go on the mortgage with him as DS only had a part time job but we had a legal document drawn up to say we had no interest in the property). DS then rented out the property and the proceeds went towards his Uni costs so he only had to take out one student loan.

He has finished Uni this year and currently living at home but can now decide whether to keep renting out his flat (he has had an excellent tenant throughout), move in himself or sell it and buy something else. It's a great position to be in.

@Dustyhedge

I have thought this through a lot as mine inherited very young and we will use some of interest to enhance their lives as they grow up but not touch the capital. My little one is aware she she a bit of money from her relative but no concept of how much and I won’t tell her until she’s capable of understanding. I don’t know what age that would be though.

I think it’s much harder with a teenager as it has less time to grow until she can touch it. I’d want to start sowing seeds that the money was left for a house deposit and will need investing but when 18 can draw on any dividends/interest to supplement loans etc for university or whatever else she wants to do. I think you want to tell her not to tell her friends and start trying to educate her on managing money in general (eg how your household is run, how expensive things are etc). I think telling a child at 18 just as they get access would be a bad idea without some education about money in the years proceeding. I think the ideal is that they see the money as something they don’t touch.

Is it legal for you to take the interst no matter that you consider it for the benefit of the beneficiary?

Be careful. Unless you have it in law that this is possible, you may be exposing yourself to litigation.

As early as possible.

This will give you years to discuss it, what opportunities it gives her, how not to waste it and also, hopefully, to use some of her life chances to help others.

I second this…my DC learnt that they were in my cousin’s will at 14.5 and 17. It was a year before the money (almost 6 figures) was distributed and there was no minimum age stated in the will, so DS got it immediately, DD’s was entrusted to us to manage (instead of solicitors and with her permission) for the last 2 yrs until she turned 18.

We started casual discussions when they received the letters informing them that they were in the will and ramped them up a few weeks later when a breakdown of the deceased’s assets indicated how much they might inherit.

We pointed out how lucky they were to have a nest egg, how much houses cost, how if they frittered it away, there would be no replacement. We also advised them not to discuss the money with their friends.

We already had S&S ISAs for them, and worked with them to drip feed the money into those monthly. If they want to blow it all, they can access the money, but not as easily as if it was in a high street account.

DS, now 23, recently turned our words back on us, emphasising that he realised how very very lucky they both are to have the money. I think it has actually helped them to save generally, as they can see the figures growing each month.

I would wait until she needs it.

That is not necessarily good advise, depending on what age she formally inherits. It is hers from that age onwards, Op cannot withhold it.

I think it depends on the kids relationship with money generally.My two are 11 and 14; they inherited a large share of their grandfathers estate when he passed last year (they were his only grandchildren) amounting to about £350K each. They know as we’ve been open and teaching them about money since they were very little and I’d like to think they are and will continue to be sensible as adults. Our eldest asked once how were investing it; other than that, they haven’t mentioned it since. The money will be theirs from age 25.

If she's year 9 now and she's going to be able to access it at 18 anyway, I'd tell her and have a sensible discussion about how best for her to invest it. At the end of the day, you can't stop her doing what she wants to do with her money but it's better to educate her initially, rather than just presenting her with a large sum and expecting her to cope.

How much roughly are we talking? Huge difference between the 350k mentioned above and say 50k, which I always knew I'd get when I was 18. I knew it was enough for a house deposit or similar and had no intention of accessing it to pay for holidays or whatever. Depends a lot on how sensible the child is too!

If it isn't held in trust, so you can't keep it from her once she's 18, then you need to discuss it now. At this point she needs to know she's inherited some money from x. It is money to help her buy a house when she's a grown up. Its the house deposit money. Don't even suggest it could be used for anything else at this point.

When she's older, you could discuss it could be used for something else eg. "If you wanted to study overseas, you could use granny's house deposit money." But keep it as the house deposit money in all conversations. It might not occur to her its possible to use it for anything else.

I knew at about that age I had a significant inherited from my aunt, who had no kids. Siblings and I were very sensible with it. I came into it at uni and it just meant I didn't have to live like crap just because of being a student, but didn't spend much. I bought a house with it as deposit once I got my first job.

I think it depends on the child. I was given inheritance from each of my grandparents as was my sister at various ages (starting when I was 18 and she was 12). I spent mine on big holidays and despite her being younger she has saved all of hers. I don't regret the holidays as without their money I'd never have been able to visit new York and Florida and made incredible memories there but sometimes do wish I'd been the same as my sister. If you think she will be sensible I'd tell her sooner as it inspired my sister to save incredibly hard and she now has enough for a big house deposit at 22.

We have always told ds's that they have a pot, that we've saved into since birth, and contributions from family for birthdays, and nanny made a big contribution when she died. We just haven't told them exactly how much is in it.

We have told them it's not to be frittered away, that it's a very serious thing, to be used as a house deposit.

Friends of mine inherited a huge amount of money when they were 20 and 18 when their parents died in an accident. The 20 year old bought a house immediately and invested the money sensibly. The 18 year old blew most of it within 2 years, taking friends to Ibiza, weekends in New York etc. And now bitterly regrets it - the money has gone, as have the “friends”, they’re in rented accommodation in a low paid job.

Not sure when I’ll tell mine, but I’ll emphasise it’s for a house deposit only.

We’ve been careful to ensure no savings are in their sole names.

I realise there are risks attached to them knowing but a bit shocked at people saying they would not tell am 18 year old. They are legally an adult and you are controlling money that belongs to them. I agree that you tell them when you think they will understand and help them understand how to be sensible with money. However, I also think that how they are with money is also a personality thing and whilst you can reach them sensibly, it may not make a huge difference.
My kids unexpectedly inherited£1000 each when they were about 10, 12 and 13. We actually have them the money and asked them what they wanted to do, explaining the options but also asked them, as we were just moving to a bigger house at same time, if they would use some of the money to buy something for their new bedroom that would always remind them of that great aunt.
What they choose to do reflected their characters very clearly and they are still the same now. Oldest did not want to save and slowly frittered it away, however she got herself a job whilst doing a levels and now always had some income, but still spend whatever she earns( often buying gifts for others as very generous) Middle child bought an expensive remote controlled car and invested the rest which he had recently used to buy an expensive bike to cycle to college in September. He does not mind spending but researches carefully and goes for quality.
Youngest who is suspected ASC, wanted gets invested, some in premium bonds, and had not spent any of it.
I suspect their lives will continue to reflect what they did with that money.
Our eldest had just accessed there money we have been saving for her all her life. It was only about £5000 but she is considering using it all to have her teeth braced! She is 18 so her choice IMO but we obviously give her our opinion.

I inherited some money at 15, 16 and 19 - about 12k in total. My parents told me each time and my talked to me about what to do with. They explained that my relatives had worked very hard to earn and save that money during their lifetimes and that it wasn't to be wasted, but was to be used for "big" things. I invested it in bonds and used it for my first car (£875!), a laptop when I went to Uni, my second car, half my law school fees (took a loan for the other half) and then my share of our first house deposit. I am very grateful to them for leaving me some money and I hope they'd be happy with how I spent it.

I would honestly wait until they are at least 25ish. The money will be so much more valuable to them at that point in their lives. I was given £3k by my grandad at 18 and spent it on clothes and redecorating my bedroom, a complete waste and not what he would have wanted. I desperately wish I was advised to save it for when I wanted to travel in my 20s after university. When you’re 18 the concept of money just isn’t the same as when you’re a fully independent adult.

Mine always knew grandma had made an isa for them and it was for studies. They are now the age where they are at uni or just left and have appreciated it hugely its meant dd2 could cope for her 2nd year without having to work. Grandma passed 3 years ago and they all say they feel like she is smiling at them each time they use the isa.

I would honestly wait until they are at least 25ish.

I really wish people would stop spouting such things, without knowing at what age Ops DD inherits. If it is 18, Op cannot legally withhold the money and it could irreparably affect her relationship with her DD if she does!

From our experience, education and much discussion is the key and the earlier the better. As a pp said, if it is suggested from an early age that it is for a house, they are less likely to feel they can fritter it. Handing money over at 18 without any prior discussion would be the worst option in my experience, but if it is in trust until 25, then 18 is Ok.

Op needs to clarify how much and at what age her DD will legally inherit it.

I would judge it based on circumstances and character. I had a friend who was told at 18 she would receive a trust fund at 24. She was not a dedicated student or good with money management as it was but this just enhanced that side of her all the more. She massively slacked, barely scraped her degree and blew all her money getting herself into debts, knowing she would be bailed (swanning round campus in a long fur coat anyone). She turned into a total dick. The trajectory of her life headed off in a poor direction.
If she'd got that information give years later when she'd matured a bit, it could have been very different.
If I had been in her shoes or might have been different as the main reason I didn't go to uni was because I couldn't afford it and coming from a poor background was afraid of debt. If I had the information I would have gone to uni (and who knows if I'd made a good job of it).
So I think the information should be sensitively handled, play it by ear, see how she is at 18 and judge whether it might detail her efforts. If she is making big decisions which knowing she has a pot of money will affect, tell her, if she is likely to end up like my friend definitely don't, she's blown the lot, has never had a serious job and has acquired a sugar daddy now. Maybe she would have done that anyway, but it did massively exaggerate her attitude at a key time in life when you are on the cusp of adulthood.

Totally agree with pp, guidance is key, don't just tell her suddenly.

I think it depends on the amount and the child. We received an absolute enourmous amount and my mum put it in accounts with our names but essentially told us we couldn’t have it until we were 21.
I’m grateful I think 18 year old me would have got giddy

Is it legal for you to take the interst no matter that you consider it for the benefit of the beneficiary?

Depends on set-up. Will was written in a way that we as parents have discretion to do as see fit. I know some inheritances aren’t structured that way. I suspect trusts are much more restrictive.

18.not before. Thing is she might choose to spend it in ways you don't approve. So Don't get your heart set on her keeping it for a house.