I've inherited a considerable amount of money

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And decided to divide it between my DCs without their knowledge.
AIBU?

I'm a single parent. 3 are uni / just finished & one at senior school. The plan is to put the money in trust equally between the 4 DC until they each turn 30.

The reasoning is, my mum died when she was younger than I am now & my dad not much older than I am. So I thought my inheritance should skip a generation & go straight to my DCs.

Is this fair?

Personally, I wouldn’t do that. I’d ensure that my children had a financial chunk but wouldn’t give away the whole lot. Seeing how my mum is struggling in old age, I don’t want that for myself. Make sure you’ve got a good pension pot, plus don’t underestimate the value of an amazing holiday. We’ve just come back from Disney World and it was amazing.

Your kids will thank you for a chunk towards a deposit, or whatever, but they still have plenty of time to earn more money. They will also one day inherit from you (especially if you place your assets in a trust) so they can use that money to pay off any remaining mortgage once you’re gone.

@Papillon23 and @HaplessRhombus To a certain extent it depends on the amounts involved and how much money the OP has aside from this inheritance.

I think the danger with keeping it and doling it out as and when is that there is a risk of her kids not all getting their intended share, especially if the OP dies unexpectedly. To keep the pot separate for each child she'd really need to have a separate bank account for each sum. Unless you're fiendishly good at keeping track of what you have given to which child and when, having it all in one account is a recipe for disaster. If the OP did die holding unequal sums of money for each child, distributing the remaining unequal sums to each child would be an absolute nightmare for the executor of the will. It's quite likely that whatever was left would just end up being split four ways even if one or two of her children had already had some or all of their share.

And regardless of whether you had four separate accounts or not, holding large sums of money in cash, all in the OP's name, isn't a good idea. It will most likely exceed the deposit protection threshold with the bank meaning that it won't be guaranteed by the government if the bank goes bust. And even with current interest rates being high, it probably still wouldn't be working as hard as it would if invested elsewhere. So realistically the OP needs to think of something a bit more intelligent to do with the money than just keep it in an instant access savings account.

The other thing is inheritance tax. If the OP owns assets exceeding the inheritance tax threshold, then if she dies either before giving her children the money or within 7 years afterwards, the money sitting in her accounts will end up being taxed at 40%.

So there are a few reasons why putting it in trust now could be sensible.

This feels like a weird stealth boast.

Of course you can do what you want with your money. Gucci handbag, a cellar full of wine, a new house or give it to your kids. It’s up to you.

I really don’t understand why you’re asking permission from the internet here.

This is exactly the sort of thing trusts are normally used for though.

Would you consider putting a condition in to allow them to withdraw early for house buying?

Personally I'm hoping to live well past the age my kids are looking to get on the property ladder.

As things currently stand I will pay off my mortgage when I am 53 and there's a high likelihood of at least one of my parents still being alive then. (I hope they are.)

With the kind of life expectancy we have these days, waiting until you die to give your kids anything means by the time they get it it will be too late for them to use it to set themselves up and they may end up wanting to pass it straight on to their children. Which actually sounds like the situation the OP is in.

If you think your kids are going to be fine, enjoy yourself, you only live once.

It’s a nice gesture OP.

I would set it at 25 though personally. With provision for sensible use beforehand.

I inherited at 18, trust fund released at 25, I used the money to put a sizeable deposit on a house. Before that the trustees released some money for me to buy a (sensible, cheap, second hand!) car and to pay towards uni costs. I got just over 100k so a similar amount.

I knew I had the trust fund but had no intention of pissing it up the wall and it set me up for life. My brother did the same, he invested it for an extra income and it’s been good for him too (he’s autistic and has physical disabilities too so limited on his earning potential).

30 seems so high a number and I wouldn’t be in the same good position now at 38 if I’d inherited at 30.

I'd be tempted to hold onto it in a sensible way (get advice), and use it when the children need it, so principally to buy property. The problem with leaving it til they're thirty is that they'll all attain that age at different points and it may feel weird.
Trusts can be expensive to set up and administer.
But on the other hand the taxation will have been taken care of on a rolling basis so there'll be no IHT or tax on gifting if it's been dolled out earlier.
You really need some in depth advice.

You need to take proper financial advice to ensure the tax situation is mitigated. Otherwise (I assume it’s a lot pf
money) it could end up with double payment of inheritance tax. See an advisor asap before you do anything.

I don’t think paying off student loans is an efficient way to use the money.

This is the thing, cute young kids often turn into asshole adult children.

My brother has inherited the family home and has moved in and bullies my mother. It’s toxic.

You can set it up however it is a right pain in the backside. We looked into it for our DCs and the amount of hoops needed, the financial advisor advised against it in the end.

I think you're crazy personally! I would keep it and use it as and when needed in a basically fair way, ensuring everyone gets roughly the same amount overall but only a proportion of the overall amount. So maybe I would set aside 120k for that but the rest I would use as I saw fit, either to enable me to retire early or work less, to travel, to support causes I'm interested in, to make life easier or more interesting! etc. My parents sold land - so basically unearned income too - when I was around your children's ages and my siblings and I saw, at most 10-15% of it. But they were very useful amounts when they came. What has been the best gift was knowing we don't have to worry about them financially.

Op I would definitely keep some for for yourself.. Even if you wanted to dole that back out to them over the years?

Wouldn't 60 grand be enough for deposits?

Maybe give them 5 grand each now and see how it goes with the rest?

Another 10 grand each at 40 wouid be amazing and...

Think about how amazing it would be to put money into bank for any gc.

I would also put 5 grand each into a sipp fir them... Self invested personal pension into either a global fund eg buying little bits of companies all around the world or us stock markets... Buying little bits of their company eg apple, Google and so on

Ie i wouldn't gift 100 in line go... 60 or even 70... Hold back some so you can gift them decent sums at Xmas perhaps or when they have dc... Give them small few grand each now, some into sipp.. For when they get to 58...little sum waiting mkre if they add to it and some for gc to put into junior isa for gc.

Is it fair to who? I’m sure your children won’t be complaining if you do this. It’s your money and entirely your choice what to do with it. Why is this even a question for Mumsnet?

And unless you are extremely wealthy some for you also

Are you ok for retirement?

As long as you split it equally, which you are

But I’d aim for them using it on housing deposits rather than just spend it on stuff and holidays

There’s no point in putting £100k per child offshore- it won’t save you anything.

Giving money to your children is great if you can afford it but you are overcomplicating it. Why would you keep it a secret from them? Surely it’s better they know so that they can make life plans accordingly.

In your shoes I’d just tell them you have £100k for each of them which they can have at any time for a deposit or else for any purpose once they’re 25 (or 30). Then get a solicitor to create a straightforward trust on these terms (pp’s point about unwinding a trust after 18 depends on how it’s drafted). Or (even simpler) don’t bother with the trust and just give them each £100k at the relevant point (this is disadvantageous for tax but gives you more control).

I think 30 sounds sensible.

Great idea!

I’ve asked relatives to consider leaving my share of any estate - which they openly say I’ll get a part of - to my children instead.

As similar ages, I hope we all die within short space of time as old people drinking wine and going on cruises. There’s no point having money come to me for a year or two before moving down the line.

I wouldn't do it until 30 because buying a house is near impossible nowadays. This could really help them. Maybe 25?

My mum did this with us a few years ago. It was invaluable help. She kept it in her bank until we were ready to put a deposit down, there was no question or debate as to what it was for. She even still had mortgage to pay but helping us was more of a priority!

To be honest, while I can see the logic in your reasoning I don't agree with your plan.

Firstly, you should be secure. You may not die young. Secondly, why not designated some of this to simply enjoy. So upgrades to make your nicer to live in, a family holiday or too. You don't have to be extravagant to do these. Thirdly, I think any plans for your children to have money in the future need to be more flexible, 30 could mean several years in grotty house shares growing their overdraft.

I think overall you just need to take more time, it's a big decision.

Why not use some of it to fund their Uni (if it really is a very big sum) then divvy up the rest. Don't leave them up to their necks in debt until they are thirty, and I would say 25 to get the rest.

I’m 25, have 3 dc and own my own home with my husband. I’d actually be pretty pissed I think if I found out that there had been 100k sat in an account waiting for me. In theory it’s lovely and a wonderful surprise, but actually there are lots of big life decisions that will have been made and that the 100k would have made a real impact against. For example, we’ve just moved house and again settled for a bigger, better house that isn’t our forever home because we were just priced out of the bracket for what we really need long term. We have no plans to move again in a few years but knowing we could have just skipped an entire house move and all the costs of moving would have been helpful at the time, and we may have waited.

I also think if there’s ever a time to have a bit of extra financial cushions it’s when DC are tiny. I would have done anything to have longer maternity leaves with my daughters (I’m self employed, so we’re talking a few weeks with each of them). Again, knowing there was 100k just sat waiting for me would make me very resentful the information wasn’t volunteered up sooner when it was really needed.

Lovely idea, but I wouldn’t keep it a secret past adulthood.