DC's inheritance 50k

[LaSenoraPerez]

Dcs (21 &14) are about to inherit c£50k each.
Elder child is on UC and lower PIP due to serious mental health issues. I understand he will no longer be entitled to UC, so will need to use the inheritance to cover his living costs.
We've never had ANY savings/ spare money, so have no idea about investing or tax. Aim would be to invest as much as possible for 5-10 years.
Any advice?

I would suggest speak to a financial advisor, and see if there is any way the money can be held in trust to help your eldest.

Agree with poster above - you really need to speak to a financial adviser asap. Both my DS have learning disabilities and we have set up of a trust as part of our wills so they will never directly have access to the money when we die - it will be 'spent' to benefit them but approved by trustees who are aunts/uncles.

Thanks for replies- elder child has full capacity: mental health as opposed to learning disabilities. There may be leeway with DWP over UC as he already has "Limited capacity to work or prepare for work" status but my research suggests same rule would apply- no UC if savings above £14K, regardless of your age/circumstances/ mental health.

Professional advice always a good idea but open to ideas and approaches on here!

For less complicated younger child too.

Lifetime ISAs, and Junior ISAs or junior SIPPs worth considering but I’d definitely get advice on your older child’s benefits situation.

The younger easier to manage- a junior ISA would be £9k per tax year but you could put the rest in a GIA and transfer over annually. They’d get full control at 18. A junior SIPP would be accessible at their relevant pension access age. For either of those, I’d do S&S rather than cash as you have a long enough time horizon. If you do feel the need to keep some accessible, then Premium Bonds often recommended with potential for good returns.

He should buy a flat. Equity in a house doesn't count towards UC. If £50k isn't enough where you live I'd advise pooling the 2 inheritances to buy a flat for dc1. Then find a way of him 'paying her back'. She won't need it for a while yet anyway and investing hers in property is a good move anyway.

Any other option you might as well burn it in a bonfire.

Definitely agree with investing in property, if you live somewhere where he could get a flat for that money.

A trust fund for your elder child, would it be possible to have a deed of variation on the will to do this? I know it can be used for mental health as well. For youngest, keep some for education opportunities like school trips, tutoring or a computer that will help invest in their future and put the rest in a stocks and shares junior ISA to be used later for a deposit.

Will look into deed of variation- thanks. Further complicated because will is in Scotland (and we are in England so less familiar with Scottish legal processes).

Does your elder child still live with you, OP?

Yes- @AutumnCrow.He's at home- but I was widowed 10 years ago, so am the only parent and unable to work as i need to look after him...

So he gives half of his UC to me to cover food, bills etc. I don't like taking money from him- but he says he would rather give me the money and have me around, as opposed to me going out to work and leaving him home alone all day in a very bad state. He managed 1st year Uni but has subsequently had to take 2 years out. Hoping he will be able to resume in Sept 2023. So living at home because unfit/ unable to work, on lots of meds and awaiting specialist psychological support..

Is your own home paid off? He could use it for that.

Clever idea @caroleanboneparte but "unfortunately" I've got less than £5k to pay off.

I know eldest may need help managing the money but if they looking to stay at home for 5 years before considering options what about putting 4000 max allowed into LISA per year you can choose stocks n shares for growth providing you don’t need to access early. Bonus is government gives 25% so the 4000 would be 5000 before any growth. After 5 years they can consider using it all to buy a property..