Would you trust your 18 year old with £30000?

[bravobravo]

My dm set up a trust fund for ds many years ago which he knows nothing about.
He'll be turning 18 in a few months and as a surprise dm will be announcing the news he'll be receiving a wedge basically.
Instead of feeling excited, grateful and happy I'm frankly scared and think he's far too young and inexperienced to be in sole control of such a large sum of money.
Dm said I need to stop mothering him and accept once he turns 18 he's an adult - I don't agree and would much rather the money was instead deposited in instalments.
Who is in the right here?

I agree it depends on the kid.

I don't think the surprise factor helps with this. When money comes out of the blue it is much easier to waste because you can spend it and be no worse off than you were anyway. It feels like spending someone else's money which is easier than spending your own.

Its better have time to process your new financial position and to let your expectations for the future adjust upwards. Its harder to waste when you become accustomed to your new wealth.

That is why old money is preserved and lottery winnings are squandered.

Like any financial issue, it is relative. If £30,000 is a significant chunk of his inheritance, if wasting the money is going to seriously damage his long term financial future, it is sensible to protect it.

If there is plenty more where that came from, maybe there is nothing wrong with letting him take responsibility, make his own mistakes and come crashing back down to reality. He can learn his lesson and be better prepared for when the serious money comes along.

DS is only 6 and he is very sensible with money now, so I will definitely trust him with the money he will be receiving when he is 18.

oh the innocence.

You may be right but you may be oh so very wrong.

I would suggest £1k cash on turning 18
and be told there is a trust fund of £29k to be used when needed for University/Car/Flat buying
Can get full amount when 21/holding down a job for 2 years

I have 17 and 16 year olds so not yet 18 and that may make a lot of difference, but at the moment, i'd go against the grain and say yes that I'd give it to them (not likely to happen in our case anyway)

DS1 saves most of his money and occasionally treats himslef, he's already saved up a few thouand pound just from pocket/birthday/christmas money.

DS2 used to spend as quickly as he got his hands on money but over the last year he has changed. He does less buying overall and no impulse buying, he is starting to build up savings but has bought a few larger things like guitars rather than frittered it on gaming.

Obviously though at 18 they may become much more social and that might be a different thing entirely.

Can you not tell him about it but then help him set up an Isa - ideally a stocks and shares one with good returns - and help him drip feed it in monthly, he can put 20k a year into it.

My DC were beneficiaries in my cousins will a couple of years ago, the payout came a couple of months after DS 18th, substantially more than 30k.

Fortunately we had spoken from the day they got the probate estimate (and thus could guestimate their share) about how lucky they were and how this would be their house deposit if managed properly.

They already had S&S ISAs that we were putting money in, I helped DS split his into bonds of 1-3 yr durations, plus a years worth of ISA money in an accessible account. He moves it from there to his current a/c monthly to cover his ISA Direct Debit.

We now have control of DDs money, she will turn 18 next year. She has some in a National savings account, the rest in the highest interest account we could get for a 16yo! I withdraw from that quarterly to again drip feed into her ISA, although she is limited to how much can go in as under 18. Once she is 18 we will do same as for DS, split between bonds etc.

Very few people know about the money, only 1 friend locally whose kids will get an inheritence at 25. She told me I was mad to tell them about the money - I didn't - they were sent a letter from my cousins solicitor days after his death!!! Plus a copy of will, probate estimate and final accounts, all addressed directly to them. And for some reason my cousin wasn't advised by solicitor to put a minimum age in will, so they got it at 18. I think, as most of beneficiaries (all cousins' DC) were older, some in 40s, it didn't occur to him.

I can understand how a lot of kids can blow it, but with ours we have gone down the route of discussion, information and proactively helping DS set up accounts. I know I would have no control if he decided to close those and blow it all, but fingers crossed he is showing no sign yet, at almost 20.

I wouldn't either I know someone who inherited about 20k, frittered it away on holidays and clothes and going out and now at 23 she wants driving lessons, a car and her own house and is moaning to her parents she will never get these things.

errr, you have....

I received some money aged 18 and put it in the bank. Ten years later I bought my first flat with it.
I was a normal wild and wreckless teen in many ways but my Dad taught me how to manage money well.
It does happen.

I think you know your child.

We saved up £12k for each of ours. The eldest two had it at 18 and have used it to see them through uni at 1k a term (only get minimum loan). It didn't even enter my head to control them.

DC3 has just started uni as a very young, extravagant just turned 18 year old. She will be getting her 1k a term doled out until I think she's become more sensible.

Some of the stories on here are shocking though. A friend's daughter burned through 50k in a couple of years after inheriting at 18. I though that was unusual but maybe not.

My partner received a similar sum when they turned 18. They used it to study ancient history abroad and are now well known in their field. The fact they have lived, travelled and have life experience are worth significantly more than being weighed down by assets in early life. Being professionals meant we could easily buy a house when we settled down.

I don't mean this in a rude way but it is the difference between the well off and the muggles how they choose to spend the first 10-15 years after finishing school.

When I was 18, my ex-boyfriend (same age) was given access to around GBP 25k that his grandparents had put away for him. He spent it all in about 6 months on alcohol and drugs and it seriously de-motivated him to continue with education or find a job.

I don't think he had the foresight to realise that it would run out...

Yes I would have always trusted them around financial matters.
I don't like the ssumption that every teenager is reckless and can't be trusted.

Both DS's are fininacial astute with significant savings (30k+)This money has come through a combination of inheritances, savings since birth and money that I have given them over the years.

We live by a saying, 'spend some, save some' and it has paid off.

I remember a few years ago being heavily criticised on here for saying that I allowed DS2 access to my bank account. I can't remember what the context of the post was. I think it was around how much money your kids have or something and I said he knew my PIN number and I allowed him to make purchases without always checking. I never once had to worry All he has ever done is orded a few film to watch from Amazon and a few takeaways.

Gong back to the OP have you taught him about budgets an investments or is this the first time he has encountered a serious money situation. You know your son best though but it doesn't sound good if you are worrying about it

I knew someone that inherited 200,000 at that age. He wasted every single penny and at 23 was in debt with loan sharks. He had no end of fake friends he gave loans too and never got back.

I am with Tinkly on that. Ours received at 18 (a smaller sum more like £10k) of gifts over their life. We put it into their personal name at 18 and left them to get on with it. Some spent more than others on university costs etc. It depends on your child. Many very rich families have age 25 or 30 as the age for a trust to kick in and no younger, particularly if they have drug addicted young men (or women) who might inherit. I would just get your mother to have a serious talk with him - a chat about his plans - university or n ot, eg he might want to fund 2 years working in Australia with it which I think would be good or he might want to use it to pay some university costs or if he's about to start a job and not study more keep it to pay a deposit on a one bed flat as soon as he can buy.

On a practical level, how would they access it? Legally it may be theirs, but if they have no paperwork, account details etc, how would they actually get it?

Both of mine are 18+ , both good savers and I would happily trust them with it . Ds (24) has more than that in savings at the moment anyway.

We have the same issue - trusts set up by relatives that mature when DC turn 18. They were going to be a surprise but DH and i decided it was better to leak the info with very very clear comments that that was it - that money is a once in a lifetime payment and that they won't be getting anything like it from us because our savings will go on living expenses in our old age at this rate.
They know the money is their one chance to pay for uni without debt/ put down a house deposit/pay for driving lessons and buy a car and that if they blow it all on full moon parties in Thailand or designer gear then they will have to live with the consequences.
I hope it's got through to them. I wish I had to countersign anythinsg they spent it on.

In a similar situation with DS who has a fund of about £16k because I carefully invested his child benefit over the years. He's now 18 & legally entitled to the money himself, but I haven't told him it exists yet!

I'm going to tell him to put it into a Lifetime ISA I think, he is sensible enough to see that an additional 25% a year from the government is worth having.

But I don't completely trust him not to, say, go and buy an iPhone X with it.

Haven't read the whole thread, so apologies if this has already been said.

I would definitely have been trustworthy at 18 - indeed my parents set up their will so I would have access to everything, including guardianship of my sister, from 18 rather than the 21 or 25 their solicitor recommended.

I think springing it on him could be a problem. I think it would've been better for him to be aware all along this was coming his way (or at least a significant sum without putting numbers on it) and that it was for his future. Then he would have had it mentally allocated to a deposit (or whatever) for years and wouldn't see it as "real" money, if that makes sense.

I would tell him it's coming, and tell him he'll need to think about what to use it for - uni costs, deposit etc. Rather than just leaving him to contemplate the cars etc he can buy with it when it's sitting fresh in his account!

We have purposely not put money into our DCs names as we think that although 18yos can be very sensible, many are also not.
We don't want thinking they have money behind them to be used as a reason not to do the best they can with education or employment.

Depends on the 18 yo. I know teens who inherited hundreds of thousands younger and made wise investment choices. It depends on how you’ve raised him!