To take the money??

[Clobberdobber]

I feel a bit conflicted. My eldest has just turned 18 and my sister (who I am very close to) has presented us with a large sum of money for him, and I’m conflicted about whether I should take it.

The background is, without my knowledge, she set up a trust for my family years ago. Over the years she’s added to it and the investments have done well so it’s now a large 6 figure sum. It’s not in the kids’ names (I also have a daughter, 16), it’s for me and my husband but explicitly to use for the kids. She has done very well in life, she sold her business for quite a lot and put some of that aside for my kids. Her own kids have trust funds and things (I assume much more than for my kids) and have been privately educated etc. She offered to pay for private school for my kids but we said no.

We don’t come from money or anything so no inheritances for either of us. Not sure that’s relevant but bigger picture as to why she wanted to share something with my kids who she is very close to.

Anyway the money is in my name because she thinks (probably rightly) giving a stack of cash directly to an 18 year old could be a bad idea. So I can choose to keep it invested for later (he can buy a house) or use it to pay his uni outright (no debt). Or I can give it directly to him (he’s sensible but still so young so I am against this idea). Daughter will get the same in 2 years. Trust stipulates use must be for kids so I can’t take it for myself, not that I would.

I’m worried about it all, maybe needlessly. It’s making me stressed that I hadn’t expected it, and also she doesn’t want to tell the rest of the family in case of jealousy. We also have another sister who doesn’t have kids but she always feels she’s left out because of this and would definitely want to know where ‘her’ money was. Sister says if Sis2 had kids she’d have put money for them too but she doesn’t want to give handouts to a grown adult who has already made their way in life. She also hasn’t told her husband / my brother in law. The way she saw it was the money came from her business, it was put in a trust (not marital assets). He would definitely be funny about it - he doesn’t like the idea of sharing their / her money (their household money has all come from her business, again relevant only in that she hasn’t taken money off him to give to me). Not close to brother in law, I don’t like him, he’s a bully and unpleasant, but it still feels like something that could cause problems one day.

Basically any thoughts. Am I unreasonable to take the money?!

Its not your money.
It is your children's money that she is trusting you to manage on their behalf.

Accept it and manage it for them and keep it confidential as she has asked.

Yes, I agree, I do think she has got it muddled. And she really needs to get straight on this, because if she agrees to be a Trustee (I wonder who the current ones are?) she and her DH will be in charge of hundreds of thousands of pounds on behalf of their children, from the looks of it.

I think you should gratefully accept it. Personally, I wouldn't spend it on Uni unless your children want to become doctors/solicitors or engineers. In other words, I wouldn't waste it on something that doesn't actually NEED a degree. I think the best way to release it to them is for their first property. Even get them a property as soon as they each turn 18, and it could be rental for them to let out and earn money from until they are ready to leave home, decide where to buy, then sell the rental and use it towards buying their first proper home. Just some options really.

I think your sister is doing a wonderful thing for your kids.

It's not nearly as easy now to buy property for the generation just now hitting adulthood. Life is so much more costly and she just made things a bit easier for them.

Your sister had the same opportunities as her generation did. She's be greedy wanting your sister's money when she's had better economic times than your kids are going into.

Think of it as a helping hand from an older generation to the next.

Well it seems the right thing not to mention if BIL is what you say he is.
She's a good sister, take it.

Of course it’s fine.

Anyway it’s for your kids, as if anyone could refuse something so life changing for them.

Don't be that person.

If you hold it, you may be liable for tax on the interest.
Tax friendly options.
Maybe worth opening:
Premium bonds up to 40k each and have winnings reinvested
Child ISA per child
Full ISA per child
DYOR.
Maybe speak with an IFA?

For my situation, a £27,000 over payment of my current mortgage would reduce my entire mortgage by 5 years, and would have been just over a 10% deposit for when I bought my current home. £4k a year into a LISA would give them a £30k deposit after 6 years.

That's why I said earlier not to waste it paying for university fees. I also earn more than most of my university educated friends and family, while not having a degree so there's that as well which could happen.

Is nobody else worried about the web of lies and secrecy this is going to create? At least 2 family members who aren't supposed to know, who will know something is dodgy immediately there is a family gathering after one of the youngsters buys a house that required a deposit neither they nor their parents had any obvious means of acquiring?

Can you imagine the awkward silence or the obvious lies when someone asks "How on earth did you afford that, John?".

This is going to come out at some point. I would insist on the right to talk about it openly. If your sisters marriage doesn't survive that then you'll have done her a favour to get her out of it.

Why would it come out? Is it normal to interrogate people about the source of their deposit when they buy a house? It certainly isn’t in this family.

I think it would be normal for comments, whether outright questions or just snide asides, in any family where it was obvious that a family member had managed to put their hands on a large sum of money that there was no obvious source for.

The aunt's husband is not stupid and he's canny about money. Not one but two of her sister's children can buy houses and the only one in their family who has the ability to stump up for a deposit is her?

It's almost impossible for things like that to stay secret inside a family. The whole body language between the aunt and the children will change for a start. People will notice.

I don’t think most people live their lives like a series of The Traitors.

I think you might have a sad awakening coming, where large sums of money and family are concerned.

I’ve managed to stay asleep for 72 years. 😊

You've been lucky then. I feel deeply uncomfortable about asking two young people to hide the source of their funding from close family members. I'm reasonably sure it will backfire.