Can I use sons trust money to buy out my partner?

[Jessica8282]

Hi, I posted a while ago about my son inheriting a big lump of money.

Well we’re awaiting the sale of that family members house before we receive the money. All I know is that I will need to hold the money in trust for him until he’s 18. I haven’t spoken to the executor about this as I don’t know them (they’re not a family member) - but I think I am now going to need to talk to them due to what’s happened at home.

Quick overview; my son (13) and I live with my partner of 7 years, and his daughter visits every other weekend.

I’ve been unhappy in the relationship for quite a while, but trying to make it work to avoid any more disruption for my son, and because it’s not always bad - especially for the kids who get on incredibly well. However one of the reasons I am unhappy is that my partner has a nasty side that comes out occasionally, where he loses his temper unpredictably and starts yelling abuse.

Well that happened again this weekend, I won’t go into the details, but it was in front of our kids and over something ridiculously petty. It’s ruined the weekend, and everything really. I feel completely done with him.

Which leads me to what on earth am I going to do. We’ve just bought this house in 2020 it felt like we’d finally settled down and achieved stability. My son loves it here, it’s close to his school, friends, we have a dog, two cats etc. I can’t see us being able to afford anything more than a two bedroom flat in a not very nice area, and it breaks my heart thinking of putting him through that again (we went through it with his dad when he was 4).

So I want to try and find out if I can use the money he’s been left to help buy out my partner. I’m going to try and get actual advice in the next couple of days, but it really impacts what I do and say right now, knowing if I have a chance to do that. My thinking is that I would then sell (or remortgage if I could afford to then) when my son is 18 - or whenever he wants his money. I could move into a smaller flat at that point and wouldn’t really matter as it would just be me.

I’d really appreciate it if anyone with legal or financial knowledge about keeping money in trust could let me know if this sounds possible or not? Thanks

But coming from a place of looking out for his well-being, staying close with friends, arraying on going to the same school. THAT is going have a huge impact on her ds life and his well-being.
Moving to a property she can afford, even if it means a flat, will ensure that all those things continue to be available to op's ds.
Op just wants to keep the house she currently only owns half of; it's not essential to her ds's wellbeing that he lives there and only there.
Peoole move house all the time without it impacting their mental health

Well it will have an impact on the ds if it means moving away from the area and her 13yo has to change school, move away from his friends etc… which is what is going to happen if they separate and sell the house. Because she can’t afford the stay in that area on her own.

Thats the whole point of her staying in that house until he is 18yo? Well that’s what I understood at least. 🤷‍♀️

it's not essential to her ds's wellbeing that he lives there and only there.

Id say I would agree with you there but then I’ve always travelled a lot.
I know from reading MN that many teenagers would struggle a lot if they had to do that. School, friendship groups are well established at that age and it can be hard to fit in into a new school with new friends.

So there is a question there for me. I’m assuming that if the OP says it would be hard for him, then it’s because it would be?

It depends on the terms of the trust but this is possible. As someone who grew up in an abusive household I would have liked my mum to do what you are considering

This is a great opportunity to teach your son all kinds of life lessons, including:

1.Respect
2.Boundaries
3.Protecting your assets

I'd have a legal contract created that made it clear your son had loaned you this money and include an agreement for when he would be re-paid

Thank you for getting it, and for the advice.

I do hope that you're given the go-ahead to invest in your son's future. Many years ago, I was left an inheritance by my Grandmother. I was 19, and was to inherit when I was 25, or if I married before that age. I waited until 25, by which time house prices had tripled. I had no financial advice, so threw a lot of money away.

Yes, I agree this is a good point.

Children shouldn't be made to feel such responsibility for their parents like this.

It's like when you read about children with 'career's as actors or models or similar as the major or sole source of family income whilst they were growing up. Often that inevitability meant the parents making decisions that the child resented or felt exploited by when they grew up.

Your financial issues should not be something he has to shoulder either by having to 'agree' to take responsibility for his 'home under threat' now, or in 5 years down the line when he should legally receive his money, but to do so would mean he yet again has to face the responsibility of what that means to his parent and her financial position.

I personally don’t think the house itself is the main issue. If it’s a family house in a desirable area it’ll sell. Prices may drop significantly, but there’s no guarantee that any investments won’t at the same time.

The bigger issue is the logistics of freeing up the money, and the costs of running a house. Will the OP willingly sell and move into a small flat, or will the son be guilted into not kicking his own mother out of the family home? Who pays for maintenance, repairs etc? Who pays for the cost of running the big house (utilities and council tax? )

Her son will also lose any FTB benefits on his first purchase.

Are you sure you will be the only trustee? A trust set up by a will for a minor should have two trustees. So I wonder if you are making an incorrect assumption.

You need legal advice personally, and the trustees need independent legal advice separate to the advice you obtain personally. That second piece of advice is to be given to the trustees given their duty to act in the best interest of the beneficiary (your son) - which may or may not align with what you want to do.

You need to be careful here OP. This has conflict of interest written all over it. So it is really important that the trustees are advised, and that you are advised by a separate law firm.

I just cannot understand why some posters are getting so heated about this. OP is not stealing his inheritance, if she buys the house and ownership remains in the trust, arguably you could say she is increasing his inheritance as the equity grows.

in 5 years time, if her DS wants to, he can sell the house, continue to live in it with the OP, release some equity to help pay for Uni, it will be up to him.

He’s not losing anything, yes OP gains a nicer place to live and raise her DS, I honestly cannot see what is wrong with that, as long as all the legalities are followed.

Its not up to him though. OP owns half.
Nobody can guarantee that she’ll be happy to sell and move (especially as there’s an assortment of animals).
Also nobody can guarantee that the house won’t be worth less than paid for in 7 years (especially as it was bought in 2020, the height of inflated prices). That’s neither here nor there, as all cash from the proceeds would go to them anyway if the mortgage was paid off. But from a ‘great investment’ POV? Nobody knows.

It is possible (depending on the exact terms of the trust, and getting agreement from the trustees) - I have a uni friend who was sadly orphaned and taken in by her aunt and uncle, and they were able to use her inheritance to buy a bigger house.

She then had a lot of moral blackmail from them when she wanted the money back to buy her own house in her 20s, so just make sure you avoid doing that. Completely poisoned the relationship as she felt they had stolen her inheritance, and they apparently felt she wasn’t grateful they’d taken her in.

I'm guessing you aren't a lawyer then

I agree

Re interest - trusts aren't normally put in a bog standard bank account earning 0.00000000whatever interest pa. They are invested. My son's portfolio is a 70/30 split. 70% stocks and shares and 30% cash and of that 30% cash, most of it is in high interest accounts and ns&i bonds and stuff with just a token 10-15 in a ready cash account.

Trustees have a legal obligation to do as much with the money as is possible.

I am not claiming to be an expert. I am just telling you my experience as being one of my son's trustees for over a decade.

It would really depend on how the Will is written and whether the person whose Will it is specified third party Trustees and the terms to which they bequeathed the inheritance. You really must get legal advice before spending any of the money but this excerpt may help you get started.

www.hay-kilner.co.uk/how-is-money-looked-after-for-children-inheriting-under-a-will/

how much is it will you still have amortgage left to pay

you know this could still take months to come through also yur partner doesnt even have to agree to this

another thing you dont know how much your house will be worth could be alot could be less and then what happens to his money

A few points to clear up some criticisms and assumptions that have been made about me:

1. I haven’t told him about his inheritance yet. I don’t want to until it’s actually been received in trust for him.

1. I didn’t use my son’s actual exact age as I wanted to reduce the chance of being identified. It seems that’s introduced some confusion for the nit pickers as I haven’t been consistent.

1. The debt I mentioned in my January post was my ex husband’s not mine. But I find the insinuation that someone who has been in debt is a bad / irresponsible / manipulative person quite shocking. Many people find themselves in debt through no fault of their own - I only included that information in my first post to explain that I have an understanding of what it’s like to not have any money at all and how privileged a position we find ourselves in.

1. We haven’t got the money yet, it’s still waiting on a house sale to complete. So my assumption that I am the only trustee may well be wrong. I’m new to this. I was under the impression that the executor would have a say over the trust arrangements so I would need to speak to them about this if I wanted to try and pursue it.

1. My understanding is that I will need to invest the money somehow anyway to try my best to ensure it grows whilst it is in trust for him. Before this had happened I had already wondered if it was possible to invest that in a buy to let property in trust for him so that it follows the value of property. My thinking was that this option isn’t dissimilar but would also keep him in a settled home during an important time in his life.

1. There is no guarantee any investment will gain value, property or shares, all investment comes with risk. So the argument that the value of the house might go down seems a bit of a mute point.

1. I find the insinuation that I would refuse to sell to give him his share rather odd - I cannot imagine why on earth any mother would do that. The whole point in everything I do is to try and make the best life for him. I wouldn’t be considering this if i didn’t feel I have a viable plan for how the money would be released for him when he’s 18. I also imagined this would be a legal requirement of the arrangement.

1. My partner’s daughter lives with her mum - and he actually has a house he rents out that he can just move back into.

1. I do have my own money, a good career and income, so I can afford a home that isn’t this one, but I would have to move away from this area as it’s too expensive (it’s inner city). I’d be happy to do that once school and being near his father isn’t an issue for him. Infact I’ve been wanting to do that for a while. So I don’t foresee it feeling particularly like emotional blackmail when I say, “right I’m selling the house to move to the countryside, and by the way, X amount of the proceeds is yours to buy your own home”. I would have loved it if my parents did that for me!

So I’m sorry, but I cannot see how anything I have asked or considered is immoral.

What I do think is immoral is piling in, with no empathy at all, on a woman who is trying to get her child out of a toxic/abusive situation with as little disruption as possible.

Lot’s of things people have said on here have been helpful and have helped me understand our position better. And I do understand that this may not be a viable solution. And I have always planned to get proper legal advice.

But, the snide comments and criticisms have been hard to read today when I’m already in an extremely low place. I dread to think what these comments could have done to someone feeling even more emotionally fragile than I am right now.

It was obviously naive of me to think that, when I was feeling so alone and trapped in this situation, that I might be able to find some friendly help and advice initially here.

To those of you who have taken the time to try and empathise with my situation and provide useful advice, thank you, it has been helpful.

This

Just suppose your son has £50k. If you put that into your house you can't just give him £50k when he is 18 as house will have gone up in value so his investment would have grown. Plus you would have to compensate your son as he would no longer be first time buyer so would have to pay expensive and hated land tax stamp duty. It would be much better to let the executives put your son's money in trust and invested for him for when he is older. You need to sort your own life out not expect bail out from your son. That is probably why you were not made executor, to stop you spending his money on something to benefit yourself. You must have known about partners temper when you bought house with him in 2020. Sell house and split money and either buy flat or cheaper house or move to rented accommodation with your son. If son had not been left this money you would have had to sort your own life out.

With kindness, OP - you put him into a toxic/abusive situation. What can you do to ensure it won't happen again?

I would have loved it if my parents did that for me!

So I’m sorry, but I cannot see how anything I have asked or considered is immoral.

But you haven’t done it for him, you will have used his money to bail yourself out of this situation, making out like you’ve done him a favour is a bit much. There absolutely are moral considerations to be made here, nobody can make you make them but you are kidding yourself making out like there just aren’t any.

Not your money. If it's held in Trust, the Trustees would need to agree. No Trustees who are acting properly would do so.

I can only assume you are trolling me with this comment.

I have a will which bequeaths my estate (in trust) to minor children.

If I knew you'd done this, i'd be rolling in my grave. if i knew a trustee i'd nominated would do something similar, i wouldn't name them.

What I do think is immoral is piling in, with no empathy at all, on a woman who is trying to get her child out of a toxic/abusive situation with as little disruption as possible

That is not his responsibility. YOU are the adult here. It's not your son's issue to fix, and you're essentially justifying spending his inheritance on a house you want to buy someone out of, to get out of a poor relationship choice, just 4 years before he may want to move away/go to uni/etc with not a thought as to the legalities (him losing first time buyer status) or whether it's truly in his financial best interests (i.e. investing in property in general, or in another house which has no ties to bailing you out along with it). Your point about all investments coming with risks is really shocking - what, so the best financial investment vehicle just so happens to be the one you want to buy your boyfriend out of?

This is totally immoral and i hope there's a 2nd trustee set up to stop you robbing him to fix your own life problems.

if you have an issue with how blunt some posters are being it's because you know what you're doing is wrong. it just is totally out of order.