Page 29 | To ask for help with financial pickle

ShoebillStork · 2021-06-19T17:11:05+00:00

In 2009 FIL had a win on the Premium Bonds. He gave us £10,000 to invest for DS (at low risk) and the money to be given to DS when he's 18. I put the money towards a loft conversion. DS is 18 soon and I'm due to remortgage for a better rate. How much do I need to release for him so he gets the £10k plus what it might have gained in interest since 2009. And should I encourage DS to get a Help to Buy ISA with it?

linsey2581 · 21/06/2021 12:32

This reply has been deleted

Message deleted by MNHQ. Here's a link to our Talk Guidelines.

Ogham · 21/06/2021 12:38

She's a parent, and having taken the risk with his money with no-one's agreement she should do right by her son

If that’s the case she’d be letting her son pay his own college fees - poof, all his money would be gone.
She’s being extremely fair and I’m sure her son would agree.

Vergingontheridiculous · 21/06/2021 12:40

The way I would look at it is who has made a gain from the investment of the funds.

You were given the money to invest on your DS's behalf. You were therefore acting as a trustee for DS. You chose to invest in property for him, which although clearly not the intention of FiL wasn't necessarily the wrong thing to do. However, you are now suggesting that you keep the majority of the gains made on the property investment, and only return to DS what he may have got had you hypothetically made a worse (financially speaking) investment on his behalf.

On what basis are you entitled to keep the gains made on the investment (ie the proportionate increase in value of your home)? Payment by you of standard household expenses as a parent, or potential future university contributions do not entitle you to withhold gains made on property invested under a trust (which is what happened when you invested your DS's money into your property).

I agree with PPs that you have to account to DS for the money that he invested, and the gains made on your property as a result.

Ogham · 21/06/2021 12:47

@linsey2581 have you read the thread? Christ people get a grip. He’s getting the money back at the intended timescale, with the intended interest rate and has had benefit of his own room and will inherit the house eventually (all going to plan) and has the backing of parents paying college fees and will get financial help in the future when purchasing a house. How is @ShoebillStork being a thief if he’s getting 14-15k back by his 18th birthday.

linsey2581 · 21/06/2021 13:19

@Ogham because she was given the money with instructions from FIL to put into an account for her son to do what he wants when he is 18. She has taken the money and used it for herself. That’s a thief in my book.

Thehouseofmarvels · 21/06/2021 13:27

Other than what I suggested below, one course of action is to explain the situation to FIL and ask him what amount should be added then just adding it on to the remorgage. I think this is the best way if it is preferable to not make FIL potentially grumpy about the situation.

WeBuiltThisBuffetOnSausageRoll · 21/06/2021 13:29

You used it on a home extension with the justification that he wouldn't have to share a bedroom with your partners son! I am shocked , to me that was never your money to spend, ever. But you think it is.

But if you invest money in a bank or other fund, they don't keep it in a big locked box for you and only open it every year or so to add a bit more for the privilege of storing your box of money for you. If you entrust it to them, it's their money to spend and do what they like with, on the proviso that, at the agreed time, they will return it to you with interest as agreed/as per the terms of the policy or investment structure.

This isn't really dissimilar to what OP has done. The only real difference is that the bank/fund would use the money whilst it's in their charge to invest in projects with possibly questionable morals. OP has invested it in something that will directly benefit the owner of the money, without depleting it at all - in fact, she's tripled the investment with her own money, at no cost to him, for his benefit, and then he will still get the money back with interest at the agreed time.

Can you imagine a lovely kind bank borrowing £10k from you, paying £30k of rent for a house for you to live in in the meantime, and then giving you your £10K back, with interest, over a decade later? If you can, let me know, as I'm moving all of my accounts to them!

WeBuiltThisBuffetOnSausageRoll · 21/06/2021 13:38

Dss will do very nicely from his mum’s wealthy family. It’s nothing to do with OP and her fil can do whatever he chooses with his money.

Wills are not just about cold cash - they represent somebody's love for you and a wish for you to take your share of all that they have to leave.

When my DSis and I inherited from our parents, they didn't leave everything to us purely because they wanted us to have 'a nice sum of money' - they did it because we were the two people they loved the most in the whole world and they wanted us to have everything of theirs once they were gone, whether property, money, valuable possessions or trinkets and memories worth nothing whatsoever on the market but nevertheless priceless to us.

Blossomtoes · 21/06/2021 13:40

Wills are not just about cold cash - they represent somebody's love for you and a wish for you to take your share of all that they have to leave

Precisely. Fil is sending a message, it’s not up to OP or her son to fix it.

AmaryllisNightAndDay · 21/06/2021 13:46

If that’s the case she’d be letting her son pay his own college fees - poof, all his money would be gone.

What do his college fees have to do with it? Was the 10K given so that she could save money on his college fees?

She’s being extremely fair and I’m sure her son would agree.

I am not so sure.

I made a decision not to do something like the OP did a few years ago. It could have been a good investment for DS but it could also have turned out badly and I'd have felt pretty shitty if we hadn't been sure to repay at least the full amount plus basic interest, so we didn't go ahead. But if we had gone ahead and it had worked out OK I certainly would not have felt right unless I gave him the full benefit of the money I borrowed from him.

To me, what the OP is proposing to do by calculating a smaller amount from a "safe" investment is a bit like someone "borrowing" money out of the till, gambling it all on the horses, winning, and then replacing just the original money in the till.

Sadiecow · 21/06/2021 13:49

Q1 had the OP refused to give the money to the child? - No

Q2 Is the OP happy to pay interest on the money she "borrowed"? - Yes

Q3 Has the child been disadvantaged? - No

So where is OP a thief? She's not stolen anything? She's borrowed the money and is returning it with interest.

Honestly the frothing on this thread is mad!

AmaryllisNightAndDay · 21/06/2021 13:51

She's borrowed the money and is returning it with interest.

But possibly not all she owes.

Blossomtoes · 21/06/2021 13:55

She's borrowed the money and is returning it with interest

As little interest as she can get away with.

Shamoo · 21/06/2021 13:56

This thread is totally hilarious. Mumsnet absolute classic. For what it’s worth, theft requires an intention to permanently deprive the victim of the stolen thing, which is clearly not the case here, given that she has always intended to give her son the money in full (plus interest) at the relevant age.

sunglassesonthetable · 21/06/2021 14:02

*Q1 had the OP refused to give the money to the child? - No

Q2 Is the OP happy to pay interest on the money she "borrowed"? - Yes

Q3 Has the child been disadvantaged? - No

So where is OP a thief? She's not stolen anything? She's borrowed the money and is returning it with interest.

Honestly the frothing on this thread is mad!*

Has the DS BENEFITTED. Oh yes 👍🏻

smallgoon · 21/06/2021 14:05

@Blossomtoes

She's borrowed the money and is returning it with interest

As little interest as she can get away with.

You're like a dog with a bone. You realise there's a life away from MN, don't you? Or is being a sanctimonious jobsworth your main hobby?

Blossomtoes · 21/06/2021 14:08

I don’t have a job @smallgoon. So sorry my mere presence offends you so much. 🤷‍♀️

sunglassesonthetable · 21/06/2021 14:09

*She's borrowed the money and is returning it with interest

As little interest as she can get away with.*

Actually she asked on here what the interest should be.

ChequerBoard · 21/06/2021 14:09

@Blossomtoes

She's borrowed the money and is returning it with interest

As little interest as she can get away with.

No-one with any common sense or ability to think logically would expect the OP to do anything other than provide the Ds with the lump sum of £10k plus whatever interest it would have accrued in a basic savings account over the period.

Such a lot of hyperbole and nonsense about theft (as if) and mega investment plans that would yield £20/30/50k (again as if).

OP I take my hat off to you for remaining calm in the face of such ludicrous twaddle!

smallgoon · 21/06/2021 14:10

@Blossomtoes

I don’t have a job *@smallgoon*. So sorry my mere presence offends you so much. 🤷‍♀️

Makes perfect sense now.

Blossomtoes · 21/06/2021 14:11

Good. 😀

sunglassesonthetable · 21/06/2021 14:14

Such a lot of hyperbole and nonsense about theft (as if) and mega investment plans that would yield £20/30/50k (again as if).

Sigh. I know. Those mega investment plans.

Blossomtoes · 21/06/2021 14:16

@sunglassesonthetable

Such a lot of hyperbole and nonsense about theft (as if) and mega investment plans that would yield £20/30/50k (again as if).

Sigh. I know. Those mega investment plans.

Careful. @smallgoon will be castigating you for posting too much in a minute. 😉

Bythemillpond · 21/06/2021 14:19

To me, what the OP is proposing to do by calculating a smaller amount from a "safe" investment is a bit like someone "borrowing" money out of the till, gambling it all on the horses, winning, and then replacing just the original money in the till

Where does it say she is calculating a smaller amount. She has come on here to ask what the amount should be

Anyone tell me where these safe investments that pay 5% interest on my money.

I would hardly think being able to give Ds his own room over the last 12 years and the subsequent uplift in the value of the property is akin to putting £10,000 on the 4.30pm at Newmarket.

AmaryllisNightAndDay · 21/06/2021 14:25

This thread is totally hilarious.

What is so hilarious about it? I had to think this through for myself for real, and it wasn't hilarious. I just don't agree that her suggestion for figuring out how much money to return is really ethical. If that's hilarious to you then you have an odd sense of humour.

she has always intended to give her son the money in full (plus interest) at the relevant age.

There are two dodgy bits here: first of all, what she would have done if she'd had to sell at a bad time and couldn't have met her good intentions to repay him; and second, whether he will be getting all the money she made from his 10K or whether she intends to deprive him permanently of some of it. If there's a big difference between the amount she intends to repay and his share of the rise in value of her property, then that's a dodgy decision.

She says herself that she is in a pickle.

I would hardly think being able to give Ds his own room over the last 12 years and the subsequent uplift in the value of the property is akin to putting £10,000 on the 4.30pm at Newmarket

It's not perfect but it was the closest comparison I could find. If she'd had to sell at a bad time she could have lost it.

Anyone tell me where these safe investments that pay 5% interest on my money.

Well that's the point. Basing it on a (realistic) safe investment is likely to give him a lot less than basing it on the value of the house.