To use my child's money?

[henparty]

Just looking for opinions on this. We are about to move house, buying a much nicer house in a better area. We can afford the repayments but are maxing ourselves with the move (trying to put as much deposit in as we can to get a better interest rate plus stamp duty, legal fees etc). We are using up every penny of savings but a year from now should be fine. When looking at the very stretched figures yesterday DH suggested we use our DDs savings. She was gifted £5000 by her grandmother before she died but the money is in an account in my name. DH said we could put the money back in within a year and pointed out that as DD is our only child (we cant have more) she will inherit the house one day anyway. AIBU to worry that it is wrong to borrow from your child?

[Cressandra]

I still disagree with your DH on justifying it as being for her benefit. It's being used to get you a better interest rate, pure and simple.

if you go ahead, it needs to be on the absolute understanding that you pay it back. Any talk of it being all for her benefit risks detracting from that "contract".

[FV45]

...and again...I ask you OP, what would the Grandmother say?

Imagine this conversation:

GM: I'm going to leave £5000 for minihen in my Will
OP: That's very kind. Would it be OK if me and DH borrowed it to help pay for the new house? We'll pay it back of course.

I just can't see it and view at as betrayal of what the GM's intentions were. If I had any inkling that money I was leaving to a child would be used by their parents then I would not want them to be trustees and would ask a solicitor or someone else I could trust.

[Oysterbabe]

When the money is repaid it should go into a junior isa or something similar to remove the temptation of dipping into it again.

[witsender]

I would. I'd be worried that this house was a stretch too far though.

[Puzzledandpissedoff]

I'm another who thinks it's just about okay if you really do intend to pay her back ... however it's hard to avoid feeling that the "she'll inherit it one day" sounds a bit like an excuse in the preparation stage

And what happens if interest rates go up?

[BigChocFrenzy]

After reading the replies here, I'll adjust my will to make DAMN sure all money I leave to kids in the family can't be touched by anyone, except by them personally at age 18.

I'd thought parents would only borrow in direst emergency if disaster struck, to feed the kids or stop them being homeless.

I'd no idea most parents would regard it as the Bank of Son or Daughter, to use for a nicer house or to top up everyday living expenses.

[MrHannahSnell]

We did something similar. Our view was it's for the benefit of the family unit as a whole and DCs are part of that unit so they can chip in. We cleared their accounts without 2nd thought.

[NickyEds]

Exactly FV45 but gm didn't do those things she just gave it to the op in her name. Surely if grandma was that bothered she would have left the money in her will to her grand child with trustees?

[BigChocFrenzy]

It's an unsecured loan, where the risk you can't / won't repay in the future is taken by the DC instead of by a bank.

[Smoothyloopy]

I borrowed £2000 off of DD last year & paid it back with 10% interest. A sound investment on her part. I was sure I could pay it back & set up a standing order each month.

[BigChocFrenzy]

The GPs were probably naively trusting, like I was until reading this thread.
Never occurred to me that parents would do this, hence why I hadn't thought to guard against it,

[MrHannahSnell]

When the were old enough our DCs were OK with the "you'll inherit more" argument as £X rolled up with compound interest would be a lot less than 50% of the house but they are both accountants.

[Xmasbaby11]

How would you pay it back in a year? Are you sure you would be able to repay it so quickly?

My instinct is no, don't factor that money into the house buy. You don't know that she'll definitely inherit the house and that's likely to be much later in life. I'm sure the money was meant for her start in life - car, education, house, travel?

[scrivette]

Yes I would borrow it. Your daughter will benefit from the new house and won't be losing out on anything as presumably she is too young to require the money now?

[BigChocFrenzy]

She could lose out if things go wrong with the house, or if some other financial need / choice takes priority over repaying her.

[FV45]

nicky you're right, the GM didn't say those things, perhaps she thought she didn't need to.

[TickleMyTeacakes]

...and again...I ask you OP, what would the Grandmother say?

I'd swear that some people on MN think they're with the Crown Prosecution.

[OneMagnumisneverenough]

Why is it relevant what the grandmother would say, didn't she die?

Unless she put the money in trust such that it wasn't to be touched, then she hasn't made any provision or wishes known. It is therefore up to the child's legal guardians, he parents in this case to decide.

I think it would be wrong to keep the money, but it is equally wrong to leave it sitting not working for anybody. If the OP and her DH can use the money and pay the child back with interest then all they are guilty off is managing her money wisely.

[Witchend]

Normally I'd think it was fine as long as you would pay it back. But I have a few concerns here.

Firstly: if it is such a struggle now, will you really have £5000+interest to pay back in a year's time? Sounds unlikely.
Also I share the concerns of others that "it will benefit her" is the slippery slope of "we've used it for her so no need to pay back".
And lastly, when you've done something once, it's much easier to do it again.
So that's the new car, the replacement boiler, decorating the house... all suddenly there's this £5000 to use. And I suspect it will lead to ultimately it not being there (or at best not having gained any interest) when she's 18yo.

[araiba]

you know it is wrong to do- the fact that you started this tread is an obvious tell.

go in to your local bank and set up an account for her that you cant easily access to remove the temptation

[BigChocFrenzy]

Grandma probably never dreamed parents would help themselves to their DD's money.
Setting up a trust seems complicated if it's only a few thousand.
A kid inheriting a fortune probably would have this protection

[exLtEveDallas]

My parents used money left to me to pay for my siblings detox. Sadly it didn't stick. But I'm glad they tried and don't begrudge the money at all (I didn't get it back). We all do what we think it best at the time. OP is going to pay it back, so it's a loan, not stealing.

[araiba]

OP is going to pay it back, so it's a loan, not stealing

ah, so i can go round taking cars for joyrides as long as i return the car, because then it's not stealing? you also need permission. which they don't have. Ask a lawyer to draw up a formal loan contract...

this is actually really annoying me now. I had no idea that people would take money from their child apart from in dire emergency.

the child is not "benefiting" from living in a nicer house- the parents are. next year, maybe the child will benefit from them buying a new car,or a holiday, or a conservatory etc

it is not op's money to borrow/steal, so leave it alone. If they can't afford it then they can't afford it. If it will be so easy to pay 5k back so quickly, then they can wait for a year and save up more to buy the house without robbing their child's inheritance.

[AugustaFinkNottle]

OP can't guarantee that she will pay it back. As matters stand they don't have a penny to spare, and she doesn't know what's around the corner. Suppose she and her DH lost their jobs, for instance?

[paxillin]

Totally agree, BigChocFrenzy, I bet several people reading this thought 'I better make sure this can't happen to money I hand on to a minor in my family'.

If granny had agreed on "OP and her DH get it now, DGD later" she'd have gifted it to OP.