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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:

Dustyhedge · 21/02/2021 19:47

RedHelenB I agree. The OP might not want to tell him about it (and I can see why) but the money in the bare trust is his, he is legally responsible for declarations and he has a right to make decisions (even if poor ones unfortunately).

Psychologically, I think it would be far easier to think of having access to the income and being advised not to touch the capital until older than suddenly realise he’s sitting on £1m that his parents have kept from him.

If he goes into certain jobs post uni he may need to make financial declarations etc.

MNOverinvestor · 22/02/2021 08:25

It's not as if OP is keeping her kids in rags/they've asked and been denied. If it is a worry, one solution might be to say very casually to the eldest at least that there's a bit of money in trust and is he happy if OP and her DH carry on dealing with the admin. At that age, if I had a good relationship with my parents, I'd say yes. When I was in my early teens, I think I did ask my father if he was a millionaire btw.

Original poster

notveryhappyhere · 22/02/2021 08:42

Thanks @MNOverinvestor they’ve everything they need for now. My eldest was telling me yesterday how it’s a rip off that Tesco salmon was £4 for two whereas Lidl was only £2.40. I want them to have that sense of the worth of money. He knows that granny has given him some money for the future and we’re looking after it for him, he hasn’t asked how much. ❤️

OP posts:

RedHelenB · 22/02/2021 10:03

You're missing the point. He is now 18 and legally the money is his. Have the conversation with him. You can always ask him not to tell his siblings about theirs until they've older.

Original poster

notveryhappyhere · 22/02/2021 10:23

@RedHelenB

You're missing the point. He is now 18 and legally the money is his. Have the conversation with him. You can always ask him not to tell his siblings about theirs until they've older.

I’m well aware, thanks for your input.

OP posts:

ItsIgginningtolooklikelockdown · 22/02/2021 10:29

To be fair OP, you do seem to think telling the 18 year old is a choice.

Blondeshavemorefun · 22/02/2021 10:35

Have you brought premium bonds with their share ? Can have £50k each

Likely to win most months with that

May be a way easing to eldest spending /having the winnings

Agree he should know but telll him maybe the million minus what uou give him /bonds etx is in trust till 30 or to buy a house

Wouid be awful if they pissed it away

FinallyFluid · 22/02/2021 10:44

If we die early, DS only child will inherit it all bar a few bequests, I am adamant that he will not get it until he is thirty and even then with guidance from family members.

Original poster

notveryhappyhere · 22/02/2021 10:46

Thanks all! I really do appreciate the input. I’m trying to navigate something that is quite life changing and could have long reaching consequences if we get it wrong. I’m feeling the pressure to do the best for our children and so if I sound a bit defensive that’s why. I’m taking all opinions on board

OP posts:

Sumwin1 · 22/02/2021 10:51

I wouldn’t tell them as they have no need to know plus your in a comfortable position anyway.

I would be interested to see how their life panned out/choices they made before I just gave my children that amount of life changing money!!

Blondeshavemorefun · 22/02/2021 10:55

As eldest is 18. What is he training to do at uni

Is that his life dream

Maybe ask him what his life dream /job is

missrm · 22/02/2021 11:02

Can you adopt me please? I just won £30 on a scratch card. Kinda hoping it was more as my MOT is today and I'm still on furlough! 🤣

Do the kids do anything charitable? They sound quite sensible!

SallyMcNally · 22/02/2021 14:19

Not really answering your main question but when my DP was younger his wealthy relative gave him £20k or so of his funds to manage. DP had to research, suggest investment funds etc and justify his decision to relative. As he proved his abilities he was given more funds to manage. It's still the relatives money but it encouraged DP to grow and manage his own investments as well.

This might be a good exercise to try with your eldest with some of his 30k?

PegasusReturns · 22/02/2021 15:15

You can neither legally or morally withhold this information from him.

The money is his to do as he wishes with and implying otherwise to him is dishonest.

The time to think about when your DC would be told about the trust was when you were setting up the trust. It’s too late to do anything now.

LimeClove · 23/02/2021 12:49

I’ve name-changed as I don’t want to link this to my usual posts. I’d keep the details of the money to yourself until they’re 25 at least and then hopefully they can channel the money into property and their own investment portfolio. You also need to think about their future relationships and protecting the capital.

Many years ago, my sister and I were gifted a very large sum of money (I had just graduated, she was just finishing school). I used mine to buy and renovate a flat in central London (zone 1). She took a good income each month when she was just starting uni. Over 20 years, my investment has multiplied, whereas she has spent nearly everything!! She’s still living in a rented house, which is just shocking really. All of that money gone. Oh and she started 2 university degrees and dropped out of both. She had the luxury of not having to think about a long-term sustainable career path and instead decided to pursue her interests in the arts (which pays actual peanuts). We’re still really close, but the difference in our financial situations now is significant. I asked my father what he thought with hindsight and he agrees that he made totally the wrong decision to give an 18-year old access to a large sum of money. I forgot to mention the sports car she wrapped around a lamp post, as it was too powerful for her as a new driver.

At some point in the future, we’ll inherit his business. My sister would like to keep it going, but I’d want to sell my half and there’s no way she’d be able to buy it out. I hope she’s sensible with the money at that point, but who knows.

Sumwin1 · 23/02/2021 15:53

You also need to think about their future relationships and protecting the capital.**

Excellent point

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