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Original poster

How to tell children about trust fund?

141 replies

notveryhappyhere · 14/02/2021 22:19

So, first of all I know that this is an extremely nice problem to have!

My inlaws are wealthy and have given my 3 children money in trust.(It's in their name so can be accessed by them whenever they like.) It was about £500K a few years ago but has done incredibly well recently and is now around £1m each. It makes me feel a bit sick to write it.

My children are teenagers and have no idea about this money. The eldest is 18 now.

We are quite well off, foreign holidays (when it was a thing), and the children are at private school. We are not flashy though and try to teach them the value of things. My eldest is at university and all of his Uni friends were at state school, he keeps quite quiet about his background and doesn't like us to spend money on him. If it is relevant, we are in Scotland not the SE England so this money is a huge amount.

I've always felt uncomfortable about the money as I worry that it might dent their ambition, send them on a wrong path as I've seen happen to others. It's a huge amount of money, especially to a teenager.

My eldest has really matured of late, but when they were first given this money he was going through a particularly silly stage (aged 14), failing at school and generally being immature which is why I was determined to keep it under wraps at the time.

Before when it was £400k to start with I felt ok about mentioning it to them as they got older, not making a huge deal out of it just 'some money for a flat/house' when you're older. But now it feels a bit of a scary amount to be honest.

Any advice? My husband (who grew up around a lot of money)is pretty relaxed about it all but it stresses me out!

Thanks and if you're going to give me a hard time this isn't the thread. I've had a tough week (death of a friend) and am just looking for advice on how to navigate this (very fortunate) situation that we are in.

OP posts:
superram · 14/02/2021 22:23

I would probably keep it under my hat until after uni-for them all. If they piss it up a wall at 21 there is little you can do. It’s not like they are struggling (at uni) as you are loaded anyway (be honest, you are!).

Lotsalotsagiggles · 14/02/2021 22:25

A friend had a similar release of money and 18-22 spent a lot of it on drugs

I'd wait til after uni and they settled in their own career plan so it's doesn't disjoint it

Beforethetakingoftoastandtea · 14/02/2021 22:26

I would also keep it quiet until they've graduated. A man I went to uni with was left money by a relative on the condition he completed a masters before he was 25. He would most definitely not have even finished a degree without that motivation.

KeyboardWorriers · 14/02/2021 22:30

I don't see any reason to tell them yet.

And before you do, make sure you arrange for them to meet with a proper financial advisor. That's a decent amount of money but at 18 I think they wouldn't be wiser enough to realise that it would still be a good idea (both financially and psychologically) to build a career

Remaker · 14/02/2021 22:31

My friend and her DH have done very well from the sale of a business and have put a lot of money in trust for their kids. Because it was entirely from their own ambition and hard work they are very determined that their kids would not slack off and would create careers for themselves not just ride on their parents’ coattails.

They have decided not to disclose the amount of money until the kids are at an age where they are independent- so, post school and university. Until then they are covering all costs so they feel there is no need to tell them. Unfortunately I think their major concern is for the youngest who is the one most likely to take the easy path in life so they are weighing up if it’s fair to deny the older kids knowledge of the money until the youngest is mature enough to handle it. I don’t think they’ve come to a decision about that yet (kids are currently at uni and school)

GU24Mum · 14/02/2021 22:36

When are they able to have the money? If it's not til 21/23/25, I'd definitely put off telling them. Id they're entitled to it now, can you at least tie it up for them so it's not easily accessible?

My children have been left a smaller but still very nice amount and I agree that I wouldn't want them (specifically not the eldest) to know about it too soon.

MummytoCSJH · 14/02/2021 22:39

It's their money, I think they should know. It's not really up to you to keep it from them. If you do as posters have said above though, I think I'd also consider how they're doing between 18 and 21. If I was really struggling in uni (assuming from your comments about private school/being well off that they wouldn't get full student finance) and my loan didn't cover my rent for example and found out my parents had hidden that money I think I'd be really hurt.

Insertfunnyname · 14/02/2021 22:40

I would say not until after uni and they are in a career maybe looking to buy a house.

If they get married and later divorced might they lose half to a spouse?

Flamingolingo · 14/02/2021 22:47

I think they’re going to need to know about it, but maybe not the amount just yet. This money is going to open doors but also be a bit of a burden. I’d probably approach in terms of them buying a house when they’re ready, and having them understand that they will be able to. I also think you need to consider telling them before they fall in love. Because you might find that they think that you’re being ‘mean’ if you start talking prenups etc. You basically need to have a very grown up conversation about the position they are in, and all of the implications, because they will need processing time. Presumably there is also the option of them buying somewhere to live now if they wanted to.

Kottbullar · 14/02/2021 22:51

If it's their money then they should know about it. Your eldest is an adult and you should treat them like one.
I find it hard to believe that if your husband 'grew up around a lot of money' that your children are completely oblivious anyway.

Sit down with the eldest and have a grown up conversation about it and assist them with getting financial advice. Then it's up to them.

MixedUpFiles · 14/02/2021 22:53

You might not legally be able to do anything about the one who is already 18, but for the ones who are minors, could you ask them to put rules on the trust for how the money can be used before the age of 25. And for your 18yo who sounds very sensible, I would suggest he follows those same kind of rules.

Original poster
notveryhappyhere · 14/02/2021 22:56

Thanks all. I really appreciate it. Thanks for not giving me a "first world problem" hard time too! Grin

To clarify a couple of things....We fund my eldest at University (partly because he was going to take a year off and then cancelled due to Covid so we didn't get our head around student finance in time and we were caught up sorting out disability allowance/support - he's very dyslexic) He's at University in England so we pay tuition fees and support him. We both had this support from our parents and are happy to do so with him.

The money is in a kind of trust that is cheaper and more tax efficient so they could actually access it from any age, it's not tied up. We had a lot of discussions around this at the time. I felt uneasy about it but it saved a lot of money and fees doing it that way.

I think we will just keep it quiet just now but like the idea of speaking to an advisor. We both actually work in finance/investment but they would probably take advice from someone else rather than us!

@Remaker that's an interesting point about the youngest. Ours is the most impressed by money/brand and image aware of the three. The other ones are more into vintage and aren't really bothered by image. The middle one is very money driven but only because he likes to make it/save it!

OP posts:
SilenceOfThePrams · 14/02/2021 22:57

What are your in-laws thoughts about it?

Would they go along with the idea that the children should be encouraged to use it wisely? In which case, could they tie it up at all so that it gives them a fixed income from 18-25 - enough to fund study at any university without needing loans, say - and then encouraged to use a significant proportion of it as a sizeable deposit on a house? Handled sensibly, the money ought to help with ambition not take it away from them - make it more possible for them to achieve their early hopes instead of being tied back to finding a job to pay the bills straight away

Original poster
notveryhappyhere · 14/02/2021 22:59

@Kottbullar my husband's family are very well off (inherited), large country house etc.. but drive old cars and are not at all flashy. I'm not sure what the children think about it - we don't talk about money really.

OP posts:
Original poster
notveryhappyhere · 14/02/2021 23:01

My husband's view is that the money is not really to be spent as such, but invested/spent on property. Kind of in trust for the next generation I suppose. That probably explains his relaxed attitude to it!

OP posts:
WannabemoreWeaver · 14/02/2021 23:01

I would say mid 20s - young enough to do something fun with it, but old enough to make sensible decisions.

Original poster
notveryhappyhere · 14/02/2021 23:03

Yes good point about half to spouse - eek! I don't want to be that mother in law!

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Snoodleberry · 14/02/2021 23:05

My siblings and I have a trust fund, that would enable us to live extremely comfortably without working, however there have been some clever things done to ensure we do not piss it up against a wall/become work shy idiots.

Happy to share via PM if it might help.

ItsIgginningtolooklikelockdown · 14/02/2021 23:06

Are there career choices that might be impacted by the money - eg a further period of study they might not want to do if thought parents were funding it, or a business idea they don't have the capital for? If so it's unfair to keep knowledge of the money from them.
I've had my teenage ds say (when discussing a potential lottery win!) that he wouldn't need to go to school, so he obviously would be demotivated by a large sum of money!

phoebemcpeepee · 14/02/2021 23:08

I inherited from grandparents with lump sums at 18, 21 & 25 - sizeable bit not quite in your DC's league - and I enjoyed but ultimately pissed away the first two and it was only the sum I received at 25 that saw long term benefits as I used it as a deposit on my first house. My Dc have trust funds from gp (again decent sum certainly enough for a house deposit but not as big as you're talking). They are teens and know gps have put some money away for them but no idea how much and we can release it at 21 but retain control until they turn 25 which given my experience seemed sensible.

Nomorepies · 14/02/2021 23:09

This reply has been withdrawn

This has been withdrawn by MNHQ on the poster's request

Kottbullar · 14/02/2021 23:13

my husband's family are very well off (inherited), large country house etc.. but drive old cars and are not at all flashy. I'm not sure what the children think about it - we don't talk about money really

I don't think you need to be flashy to be obviously wealthy, in fact you don't need to be wealthy at all to be flashy!
From what you've said your son is aware of his wealth already to some extent.
In any case your husband is probably best place to advise, he's presumably had a similar experience?

mootymoo · 14/02/2021 23:14

I would tell them but say they can access it for specific purchases eg driving lessons and a car, travel over the summer (reasonable budget) etc. Less money but I control my kids trusts still in their 20's

Clevererthanyou · 14/02/2021 23:17

Honestly, I would wait until they're a good couple of years into their twenties. My best pal inherited a massive amount and blew it before she was 21 with nothing to show for it. If they need anything in the meantime it sounds like you're in a position to help.

Original poster
notveryhappyhere · 14/02/2021 23:17

Thanks again. It's a relief to hear that most of you agree that my instincts were good in keeping it quiet until now at least as my husband has always had more of a relaxed view. On reflection, I actually think my eldest would be very stressed by it so we'll need to manage it carefully. He saved £1k through working and got a decent amount of cash from us and family and god parents (maybe £800 in total) for his 18th and it stressed him out to have all that money!

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