To take DD’s trust fund..

[BlueFlamingo55]

AIBU to take part of DD’s trust fund to pay for our new house?

DD has quite a modest trust fund (~£30k) that I had promised to give her this year since she is now 19. The money is my inheritance from DF but instead I decided to put it away for DD when she was younger to help with her university costs, first car, house deposit etc.

Life didn’t turn out quite how I had expected it to and I have just come away from a messy divorce and am now having to purchase a new house in my 50s.. I’ve found a home that both DD and I love but my deposit (my share of the equity money from the marital home) wouldn’t be enough. I therefore decided that I’d take half of DD’s trust money to top things up. I do not want to do this and it was never the plan but it’s the only way I’ll be able to afford this house. We’ve explored cheaper options further outside of town but DD refuses to live in any of them (and I quietly agree with her, I much prefer the area this house is in)

I made the mistake of telling DD my plans re: the trust fund and she has gone absolutely ballistic, for want of a better term. Saying that I’m stealing her money and how will she possibly be able to afford her travel plans etc etc. Apparently I’m trying to ruin her life. I’ve reminded her that I help her out financially 24/7 and she is not hard done by but there is absolutely no talking sense into her. She has refused to speak to me all week.

Am I really the worst mother in the world for taking £15k in order to pay for good, permanent accommodation for us both?

I don't think you are wrong to use the money, I think your mistake was presenting it to DD as a done deal. If she wants the nicer house, you should have approached her, and asked her to help you buy it, telling her without her assistance you would have to go for a cheaper house. Is this a conversation you can have with her now? Put the ball back in her court as to how the money is spent, and which house you go for? It sounds like she is assuming she can have all the money, and the house she likes. She needs to be aware of the reality.

I’d use what has happened as a bit of a reset. It is a risk to plan to work past retirement age. It may pay off but it may not and things can go downhill very quickly and unexpectedly.

I would chose where you live on where suits your needs for the future . There is a hell of a lot to be said for location but there can be compromises that can work really well. We went from a beautiful area to somewhere people are generally a bit scathing about but it works really well and now in my mid 50s being one of the unlucky ones who unexpectedly went from running several times a week to 2 walking sticks fairly quickly I have really reassessed my priorities. Fortunately I can walk again at the moment but have a chronic health condition and know things can change and it has been an eye opener.

I think I would give DD the money but stress she will need to make sensible choices as with the change in your circumstances you won’t be able to financially support her though there will always be a bed wherever you live for her. Then think very hard about where you move to and find somewhere that works for you.

Either this is a trust fund or it isn’t. If you actually set up an account in her name then you will be breaking the law by taking it from her. If it’s in your own account but just earmarked for her then you can go ahead but at the risk of your entire relationship with your daughter

YANBU and she’s an ungrateful sod. If she’s that bothered then give her the £30k and tell her to rent somewhere whilst you buy somewhere in the ‘less desirable’ area that she refuses to live in.

But it technically was never DD’s money which makes it so messy

If someone says they are going to buy you something expensive, whilst it is a nice gesture if they then end up broke through losing their job then would you still expect them to buy you the present?

OP - the money is still in your name - I’m sure you daughter has gone crazy but she will get over it. Get a decent house/home for the both of you and point out that she is still getting 15k (which is a lot) and may well inherit more later - neither of which outcomes it sounds like you benefited from as a young adult.

Personally I would be telling dd to grow the fuck up. She can’t demand a house she likes and have the money. Her choice.

I would be not paying for anything else for her if she takes the money. With the money though comes rent and shared bills.

She can’t have her cake and eat it too

Spoilt Brat who is going to blow through £30k and hasn’t learned the value of money

Needs to learn the difference between an appreciating and depreciating asset if she plans to spend the money on travel

The important word here is 'Trust' fund
It's in trust for your daughter

Did you really set up a trust fund, which has legal implications and consequences, and it would be a literal criminal offence to plunder?

Or just a tax dodge, setting up a savings account in her name with your money?

If the former, then you cannot take her money

If the latter, well, then we all know what sort of person you are, and you'd be lucky if your daughter ever speaks to you again - she might even report your tax evasion to the HMRC

It's a pity you ever told her about the money - but that ship has sailed.

I think you need the money for a much more important reason. She will get over it and understand eventually.

I can see how £15k would make all the difference to a deposit. You're in you 50s, you can't get the longest mortgage, all the deposit money will make a huge difference.

You also said DD doesn't like the houses outside the town so let her know that's the cost of it.

She is 19 she is able to understand the whole situation. Tell her you are sorry that you had promised her the money but that it is needed now to secure you both a home. Remind her that in the fullness of time she will receive it back - along with the rest of the house (assuming she is an only child and it doesn't get swallowed in care fees)

I hate to be that person but at her age I was fully financially independent. I have a savings account for each of my DC but it is in my name and they will never know about it.

OP, it is still your money. Use it wisely to set yourself up now & build some security into your life.

It seems to me that you make assumptions about future monies

There is no guarantee that your DM's estate will meet anyone's great or even modest expectations. As you now know from your divorce, financial security & well meant plans can be easily torn up. Financial advisors caution about gifting sums that may not really be available, more wishful thinking than sound financial planning.

As you said, you made a mistake telling your DD about the notional sum & you continue to set her up with expectations.

Secure getting the home you want & coach your DD to work towards rather than expect to get.

I guess an equitable solution would be that the £30K is used for the new home, but the daughter is added to the deeds as a Tennant in common for whatever %age £30K would buy.

This legally ring fences it for the daughter going forward and the OP can buy the daughter out if she wishes at a future point.

This is probably the worst outcome, the daughter would lose first time buyer relief on stamp duty and some better rate mortgages when she wants to buy all for the sake of her initial 15k which is always going to be tied up in the mothers home.

How would she feel about buying a share in the house?

That way she gets a stake in the property rather than just losing 1/2 of her inheritance?

Give her the options

this house - you keep £30k
this house - you keep £15k

life lesson you can only buy what you can afford.

so quit complaining about the other houses

it’s a factual comment about a finite resource

That’s a great idea

Was going to say exactly this after seeing people suggest adding her to the deeds. Bad idea for the reasons outlined above!

In terms of the money, if a proper trust has not been created and the money is only ringfenced unofficially (ie that’s how you view it) and is sat in an account in OPs name then she doesn’t need to consult the daughter before using the money. If however there is a trust in place and she is the trustee then she must manage the funds in a way that is in the best interests of the beneficiary (the daughter).

Can people stop suggesting this, please?
First time buyer status is important later

Neither. Please read OP’s updates

That’s not true. Trusts set up by a parent for a child are taxed as though it's the parent's income.

I don't think so. She sounds quite immature.

Who knows she might start kicking off and demanding her stake is sold to fund a big party or something. And this time it will all be legally written up if she is given a stake.

Probably better to tell her that you will refund the money as and when you are able but for the moment it is needed to secure a house, and she will have to get by on a mere £15K.

This is the logical answer - she is an adult now and should be able to understand that financially it can't go both ways, the house she wants isn't within budget without that money, if she refuses to discuss a plan (you repaying it, or her not paying rent) then the simple answer is that house is a no go and compromises will need to be made on something you can afford

Not a trust fund. Not DD money. RTFT

Buy your house in the safe area OP. Down the line you can maybe remortgage or get loans - she does need all of it today. Also I would see that as prudent as she can burn through that £30k very easily - and holding back teh £15k when she gets real and needs it down the line for a house desposit would work in her favour.

Assuming she is an only child and will get the lot anyway - and has more inheritance to come. I think kids need to work for all of the things you say she she wants to spend it on to tecah them early the value of money. Mine have done all of these things and always had 2 or 3 jobs to fund. We have more than enough money to help them but believe in work ethic. With their property deposits this is where we have deviated because we live in London and property is extortionate - they have lived at home, paid us minimal rent and saved for £50K their deposits and then we matched it.

You need to be the sensible one here and save that £15 for when she buys a house which sounds like a long way off - I also wouldnt give her the other £15k straight out - does she need a car?

If I were you I’d give her the £30k, rent somewhere and use the £90k for nice things.

This is an almighty mess of your own making. There may well be grounds for the daughter to sue you for the money if it can be proven that a verbal trust is in place. It is hard to prove, but if from the outset you told her that it was held for her as the sole beneficiary? I have a good understanding of trusts but this is specialist legal stuff.

Morally? If the money was promised then its pretty awful to go back on that. That said, she needs to understand that you're not in the position to buy a better house, and if she doesn't like it, she can vote with her feet.