Another inheritance one!

[GrumpyL]

DF passed away, DM is now late 70’s and lives on her own. She and DF’s Will left everything to each other and then 50/50 to me and DB when they both passed. DM has now changed her Will to leave £50k to each grandchild (DG) and then what is left to me and DB to split 50/50. All DG are under 10 so money would possibly have to go into trusts until they’re 18 if DM passes in the next 8-10 years. My concern is that my DC could inherit £50k on their 18th birthday’s and I consider that to be a lot of money for a young person to manage. None of us know what situation our DC will be when they’re 18 (working, at uni, living in a drugs den -ok I hope that one is an over exaggeration). AIBU to raise that I’m concerned that what is supposed to be a positive to help the child in their lives could become a negative if they’re not ready to handle that amount of money? I do have very genuine concerns and I have spoken to DB but I just get told I’m overthinking it and the DC will be fine, they’re sensible children (they’re all still at primary school!).
Has anyone on here had a child who inherited a large amount of money, was it a positive or negative experience for them?

If you're concerned, you could ask your mother to change it so that the grandchildren don't inherit until they are 21 or 25?

I would be as concerned as you OP.

My 'very sensible' kid had a mental health crisis as a teen and without going into details a large amount of cash at 18 would have been an unmitigated disaster.

I think there might be a relatively easy way for it to be held on trust but you need some advice. Would your DM be open to that?

Most solicitors will suggest that minor children inherit at 25. This puts them at an age post higher education and there are usually clauses that allow trustees to advance sums to them if needed for maintenance or education purposes (so not for wine, women and song!)

Would your DM be open to that as a suggestion?

I think the type of trust you set up could limit the scope for impulsivity/drugs binges, you don't have to make it so the whole lot becomes available at 18. It could be set up so money can only be used for set purposes eg education, property purchase, setting up a business etc.

It's fairly common to have trusts where money could be spent on school fees, horse riding and so on but not frittered on any old thing. Trustees are appointed to hold the purse strings.

You might want to check with a lawyer though!

And this is exactly why I don't think (barring the breakdown of a relationship etc) inheritances should skip a generation.

It sounds as though your mother has a significant estate so I appreciate that there may be tax implications, but would it not make more sense for you and your DB to just inherit 50/50 and pass it on to your children as you see fit?

I think you're right OP. My will is the same- everything to DP but then to be split between the kids when they're 25 with trustees to release money for further education or emergencies as appropriate. I was swindled out of about 10k by a boyfriend at 25 and want the girls to be in a better position.

I would explore the impact that them having access to this sort of money would have on access to student finance. It may be that having access to this money at 18 rather than 25 would reduce student finance support and result in them having to spend the money on education that they wouldn’t have to otherwise?

The 50k per grandchild can be pot in trusts until they are older than 18. They can even specify X amount at age 21 and X amount at 25 or X amount when they ourxhase a house and X amount when they get married. Your DM jist needs to make sure she has trusts put in place to do it that way.
I would also worry 50k at 18 is a little bit too much, even for a sensible 18 year old.

The terms of the trusts can be varied if all beneficiaries (or their representatives) agree so you can set it up to make sure they don’t inherit till 25 or whatever.

My DC inherited a lot of money in early 20’s - and blew the lot!