Small inheritance

Carsarelife · 2023-03-01T12:07:02+00:00

Due to the sudden death of their uncle my 2 DC are getting a small amount of inheritance each. DC 17 is getting 9K DC 8 is getting 6k What best to do with the money. I don't want DC 17 to just have the money as I feel it would be wasted. I'd like it to go into a bond or ISA. Are ISA's still a good bet? Am I allowed to invest the money for her as she is 17? Still legally a child but has her own bank account? I'm also inheriting 11k and hoping to buy a car with mine

nannynick · 01/03/2023 12:26

Do they have existing Junior ISAs? £9k can go to that.
At age 17 they can have a Cash ISA, so remaining could go to that but you may be able to find an interest paying savings account which pays more. Do they have a bank account themselves which has a savings account linked to it?
It could be parked in NS&I Premium Bonds.

Then at age 18 they could move £4k to a S&S Lifetime ISA, then be encouraged to add to that each year to save long term towards a flat deposit.

Some money could be allocated to spending, now, plus in the near future, particularly on something educational related.

nannynick · 01/03/2023 12:32

If the money is paid to them from the estate then you can encourage them what to do with it.
If the money comes to you and then you are giving it to them, then you can decide what happens.

That is how I see it.

At 17 they can have a Cash ISA themselves, plus have a Junior ISA which they control with you but cannot access until age 18. At 18 they can have investments so can have S&S ISA, S&S LISA.

They can also pay into a pension. If they have no earned income they can put in £2880 this tax year and same again April 6th 2023. That £2880 becomes £3600 once tax relief is claimed by the pension provider. That is locked away for the very long term, they may not get access until age 58 or latter.

Original poster

Carsarelife · 01/03/2023 12:40

@nannynick yes the money is coming to me. There is no estate to speak of. My dad is executor of the will so will be paying everyone's money direct to me.
They both have ordinary bank accounts and my 17 year old has a child trust fund that she will receive in 6 months time.
I think I will open a junior ISA for the 8 year old. The small print worries me where it stated investments can go down aswell as up.
If I open a junior ISA for the 17 year old they will be able to access it in 6 months anyway. To be honest I wanted to put the 9K away for 5 ish years for her to have at 22. I think that would be a good age for the money.
I know their uncle would want that too.

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Original poster

Carsarelife · 01/03/2023 12:41

@nannynick also what is a cash ISA? Is that different to another type of ISA?

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soleilblue · 01/03/2023 12:42

Is the money left to them? Or is it just what uncle decided to do. Why the differing amounts?

soleilblue · 01/03/2023 12:42

Carsarelife · 01/03/2023 12:41

@nannynick also what is a cash ISA? Is that different to another type of ISA?

Yes. A cash isa is just a savings account for cash. A stocks and shares isa is invested in things.

Original poster

Carsarelife · 01/03/2023 12:45

@soleilblue no uncle hasn't decided this. My dad has decided this. The 8 year old wasn't named in the bond paperwork, this is because the bond was opened before 8 year old was born. The money was originally being split 4 ways - my parents, myself and 17 year old. My dad says he will only give my 8 year old 6k as she has 10 or more years to build the money up. First of all she wasn't getting anything until I complained.

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Tapenade · 01/03/2023 12:46

Has the money been left to them directly by the will?

If so, unless there is something specific in the will you can’t just decide to lock it away until your DC is 22 - they’d become entitled to it at 18

nannynick · 01/03/2023 12:49

S&S Junior ISA can be invested in global equities and the value will go up and down but the general trend over a long period of time is upwards. Cash products lose money, as they pay less interest than inflation. So cash JISA should be avoided for someone aged 8, as they have 9-10 years of time for an investment to grow.

The Meaningful Money Handbook has about 1/3rd of its content about investing. It is a good starter book if you do not know much about investing as it describes how to choose global multi-asset funds, which are low cost and do not involve picking individual stocks.

Original poster

Carsarelife · 01/03/2023 12:49

@Tapenade no the money was in a bond and my dad had court of protection over my brother. Only 4 of us were meant to split the money from the bond. The total money is 48k myself, mum, dad are getting 11.5k each, DC 17 9K and DC 8 6.5k

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Tapenade · 01/03/2023 12:51

Carsarelife · 01/03/2023 12:45

@soleilblue no uncle hasn't decided this. My dad has decided this. The 8 year old wasn't named in the bond paperwork, this is because the bond was opened before 8 year old was born. The money was originally being split 4 ways - my parents, myself and 17 year old. My dad says he will only give my 8 year old 6k as she has 10 or more years to build the money up. First of all she wasn't getting anything until I complained.

OK, this is actually sounding more worrying. Depending on what the bond paperwork says, your dad may or may not actually be entitled to make those decisions. Do you have access to any kind of legal helpline who might be able to look at things and explain?

Original poster

Carsarelife · 01/03/2023 12:54

@Tapenade it's only 4 of us that were due to inherit.
I don't want to rock the boat too much as they have lost their son. My DC8 wasn't due to inherit anything so I complained a little bit. My dad should have changed the bond details when she was born but he didn't.
My brother had a bad accident and didn't have capacity. The 48k has come from the equity from his house.
I even considered splitting mine and my 2 DC money fairly 3x ways.

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Ffossip · 01/03/2023 12:59

@Carsarelife I imagine your dad will need to apply for a deed of variation to the will in order for the money to be "inherited" as you describe.

Please seek legal advice on this - there may be tax implications otherwise that you could incur unnecessarily.

soleilblue · 01/03/2023 13:02

Ah sorry yes dad.

Personally I'd top up your youngests out of what you inherit.

I'm pretty sure once it's paid out to the beneficiaries they can do what they want

Original poster

Carsarelife · 01/03/2023 13:04

@soleilblue my dads thinking is I need my money to buy a car and youngest who is 8 has 10 years to increase her money and will hopefully end up inheriting more than we have once it pays out

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Original poster

Carsarelife · 01/03/2023 13:06

@Ffossip there isn't any will as such. My dad put my brothers money into a bond that would pay out if he died. We wasn't expecting it and he's died unexpectedly. Hence why my 8 year old wasn't on the bond. When I say Will I mean the names listed in the bond. It was just an investment bond.

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LittleOwl153 · 01/03/2023 13:17

So your brother died without a will in place? If so your parents inherit equally I think, so your dad (with your mother's agreement) can do as he likes with the money.

In terms of what is then set up, it becomes your dad's (&mum's) gift which they can dictate the terms of I guess. Which if he's happy to foft it to you for you to donas you want with Nd then you choose to lock away the older child's cash then that is your choice. You will need to look closely at terms of investments though and when they've handed over. I wouldn't have thought it was enough money to set up a formal trust with - as these things cost money to set up - but worth looking at.

Do check out inheritance tax rules though as your dad gifting you ~£25k (even if you are onwards gifting) might have an impact and might also be seen as deprivation of assets for care needs depending on their age.

YetMoreNewBeginnings · 01/03/2023 13:18

Your Dad needs to check the legalities of what he’s doing.

A deed of variation can only be agreed between adults. So if your teen is meant to get 1/4 then that may have to happen.

A minor can’t agree to sacrifice an inheritance.

DogInATent · 01/03/2023 13:43

Carsarelife · 01/03/2023 13:06

@Ffossip there isn't any will as such. My dad put my brothers money into a bond that would pay out if he died. We wasn't expecting it and he's died unexpectedly. Hence why my 8 year old wasn't on the bond. When I say Will I mean the names listed in the bond. It was just an investment bond.

I think you need some specialist advice, starting with sorting out what investment was set-up and what is allowed to be done with the proceeds. It sounds like a Life Assurance Bond with four named beneficiaries. But you're really confusing this with talk of wills and executors.

It's likely that the proceeds will have to be distributed as per the written distribution (i.e. excluding your daughter) but the four beneficiaries would be free to agree to each make a gift to your younger daughter to give the effect of a different distribution. You won't be able to force this though, it'll be for the four of you to choose to agree or not individually.

Just as an aside though, your older daughter is almost an adult. You don't want her to have immediate access to the cash, but you then say that you are planning on spending your windfall on a car. Investing at her age is a good thing, but having at least some of it to spend to remember her uncle by is not a bad thing.

DancingDaughter50 · 04/03/2023 08:06

Op the stock market fluctuates. If you are concerned look at charts from way back. No matter what the dips are they go up.
Don't buy one lot of shares, but loads and if one fails totally eg marks and Spencer then you won't be affected.

We spilt ours between a rather pitiful cash isa at 3 % to be used at 17 for driving lessons /car....

AND larger stocks and shares for bigger life choices like house deposit or uni. If... They go mad and totally spend the cash one hopefully they have learned the lesson and save the other one.

Bunnycat101 · 11/03/2023 06:40

The younger one should definitely have the money invested as your dad is right to a degree that they have time for it to grow. The older one is trickcy- if you can encourage them to put some in a LISA when they’re 18 they’d get the government bonus and then wouldn’t be able to touch it until buying a house. They are at an age when they’re likely to want to spend some on driving, travelling etc and that isn’t necessarily a bad thing so there is something about speaking to them about balance and being responsible in working out what to save v invest v spend.

TennisWithDeborah · 12/03/2023 12:50

Bunnycat101 · 11/03/2023 06:40

The younger one should definitely have the money invested as your dad is right to a degree that they have time for it to grow. The older one is trickcy- if you can encourage them to put some in a LISA when they’re 18 they’d get the government bonus and then wouldn’t be able to touch it until buying a house. They are at an age when they’re likely to want to spend some on driving, travelling etc and that isn’t necessarily a bad thing so there is something about speaking to them about balance and being responsible in working out what to save v invest v spend.

Definitely agree with this.

Your DC may need the money for university, or for a small car if she’s going to work. Have a chat with her about it.

I am so sorry for your loss, which you say was unexpected. Bless him.