Continuing my dad's wish to pay uni tuition fees for his grandkids

[falstaff1980]

My father had been doing this the last few years, paying the £9250 into a 5-year-fixed account for my kids each September, the intention being that when they matured my (by-then mid-twenties) kids could either pay off the tuition fees or use the money for some other sensible purpose ("not buying an expensive car" my dad said specifically to them), I think he had in mind a deposit for a first house/flat.

Sadly my dad was ill and passed away last September. My mother said she still wants to continue paying this (my two younger kids have 1 year, and 2 years left at uni respectively, the eldest graduated last year and so got the whole 3 years of fees).

The reasons I'm hesitating on this is:

1. My mother has MCI, possibly early stage dementia, I have an LPA, but feel uncomfortable paying this from her account when I know my mother is no longer able to remember how much money she has. If she was 100% well I'd leave it to her to sort out with my kids.
2. She might need that money herself for care costs, she has over £200k in savings (plus the house she owns and lives in), and since she's already needing some low-level care, giving away nearly £30k could be seen as deprivation of assets.
3. I don't know how this will go down with my sister, who has no children and has not been well herself. I'm not even sure she knew that our dad had been doing this before, it was something he sorted out direct with my kids.

Any thoughts and opinions welcome.

Deprivation of assets comes into play when she can no longer fund herself and needs LA assistance. If her house is worth, say, £200k, this would be if she needs about 6-8 years care. If she’s unlikely to live long enough to eat through savings and house, you don’t need to worry about deprivation of assets.

You should seek advice on whether paying off student loan is a good idea. Read Martin Lewis on moneysavingexpert.

https://www.gov.uk/government/publications/giving-gifts-a-guide-for-deputies-and-attorneys/opg2-giving-gifts-for-someone-else-web-version

I think you continue for now as there is an existing pattern that you can evidence and continue.

However, I would not let that money be spent for the next X years in case it has to be returned.

Is it all in one account? Can you just divide the total between all children so they get equal amounts but don’t add anymore?

Thanks all, some good suggestions here. I’ll have a close look at that link of gift giving for attorneys.

What is in your mum's will and does she still have capacity to make/amend one. If so how about looking at putting the money in individual savings accounts in her name and bequeathing any amounts in those accounts to your DC in the will. That way if them only is needed for care it's available but if it isn't the DC get it but possibly later.

I'd carry it on, there's only 3 years left so about £36 000.Seems a bit unfair on the younger ones not to given that was the GPS intent.

Yes, that's what I was thinking as well. If this is a single fixed term account, the money that's already in there could be shared out equally and that would mean each child got the same amount of tuition fees covered. I also agree with @MereDintofPandiculation to look at Money Saving Expert to see if paying off the fees is the best option.

I would share your concern @falstaff1980 that it isn't right to keep adding to the fund now that neither parent is able to make that decision.

I'd carry on too.....deprivation of assets would only come into play should the local council be asked to pay for Mums care and by that time I'm quite sure £36k in 2024 will not be that big a deal

However there are only a couple of circumstances when paying off student loans is a good idea. Therefore don't jump to doing that

£200k, this would be if she needs about 6-8 years care.

in your dreams! Residential care is currently about 1400 a WEEK It wont get cheaper either

So that 200k will last about 2 1/2 years at current rate

/ Martin Lewis’s guide on paying off student loans

specific to those who started before 2022. Has changed since

Is inheritance tax likely to be an issue when your mother dies? If so they amounts in the 7 years before she dies will be subject to inheritance tax (sorry if you've already mentioned that, I did read the thread but may have missed it).
The problem with paying off some of the student loan is that it doesn't actually reduce the monthly payments - you pay the same whether you borrow £10k or £100k. Of course it reduces the overall debt but whether it's worth doing depends on whether they are likely to ever pay it all off. Two of mine may not, one probably will.

Between 2012 and 2022. He has separate guides for those who started before 2012.

I haven’t looked for 2023 onwards but he’s usually quick at updating.

Yes it is often better to repay now. Much more so than before.

I would carry it on. DF clearly wished for all the children to receive the same. Who knows, DM may well have known about this and agreed, or she might even have suggested it in the first place.
if your sister has no children, this system was possibly your DF’s gift to his grandchildren by you, so that his inheritance in his will would go to his wife and then be split between you and your sister.
I understand people saying Martin Lewis recommends checking out carefully whether it’s worth paying off a student loan but in some circumstances it is.

@Jessbow , you're forgetting the house and OP's mum's income in addition to this. In my LA, £1400 is near the top end of weekly fees. I would say the average self funding rate is around £1k weekly where I am.

When we were looking 9 months ago the lowest was £1200 but £1400 was typical. There were plenty that were more expensive than that. Not in a particularly affluent or expensive area.

If your parents always had a good relationship with all his DGC They will have brought your parents much joy and pleasure over the years. If your Mum is in agreement now I'd transfer the £36k now whilst you still think she knows about DGC uni fees and understands. Then going forward if her MH declines you won't have to do it without her knowledge/consent. It sounds as if your Mum has plenty of money left to live on and if in the future she has to sell her house to pay for her care her savings and house would pay for it for 5 or 6 years plus she would still be getting her pension coming in. If you think she won't need to go into a home for at least a year then that would take you up to 7 years. She might not even live that long. If this was your Dad's wishes I'd stick to it.

I'd carry on, but I would definitely tell my sister.

I usually don’t post but spotted this and had to reply. I fell foul of this with my grandmother. She had been gifting my nephew money each year for school fees and I continued it under LPA but you cannot make large gifts even if it’s continuing a prior pattern. Have a look at the rules around gifting with an LPA. It’s complex but we ended up in a mess over it and I wouldn’t wish that on anyone else.

Deprivation of assets is unlikely to be an issue because there is an established pattern of giving. Page 8 here has some advice https://www.lgo.org.uk/assets/attach/6292/DoA-F.pdf

£1800 5 years ago here (nursing care).

I understand people saying Martin Lewis recommends checking out carefully whether it’s worth paying off a student loan but in some circumstances it is. Yes, and that’s what Martin Lewis says.

Is that for care home or for nursing home?