If you were given £100K, what would you do with it?

[TooCautiousToBlowIt]

PIL have decided to give us £100K as they are worried about inheritance tax. No strings attached. (I know, they are wonderful!)

Only thing, is what do you do with the money? We don't want to just blow it. Nor do we want it to sit in the bank, eroding. Property is too risky these days.

What would you do?

Pay off the mortgage.

If no mortgage, put in high interest account until credit crunch gets really crunchy, then snap up a flat and let it.

If you're in it for the long term and don't have a mortgage on the property (i.e. no need to worry about what interest rates are doing) then it can only make you money in the long term. Plus it gives you an income. Plus it is somewhere to put sprogs as a launchpad to moving out if they want when they are older!!!

personally, I'd use it as a deposit to buy a house.

if you already have one, pay off some mortgage, and then remortgage so your monthly payments are smaller (so you get the benefit now, rather than in 20 years, when your kids will be grown up and you won't need it so much anyway)

Pay off the mortgage and with the spare, decorate the house and then go on holiday (our mortgage is only £80k now) so it would go a LONG WAY!!

You offering?!!?!

But it wouldn't be you having to pay the inheritance tax - it would come out of your parent in law's estate. Obviously if you are the sole beneficiaries it would be paid out of the total amount and you would receive the rest, but you would not have to pay out of the £100,000 you have just received.

Also, if they have not already done so, why don't your pil's see an IFA? There are other things you can do to mitigate against Inheritance tax such as trusts.

without reading the rest of the thread...

I would pay off all our debt, book a holiday for next year (we don't have holidays ) would put some down as deposit on a house - housing market maybe risky but i may never get the chance to own a home again

Take the boys to the cinema because they have never been, and book them a party because they have never had one of their own

then i would have a small amount just to buy "stuff" with - just a couple of hundred £s - i have never been able to do that as every penny is accounted for here.

I would pay off all our debts (prob 50,000 incl mortgage)

I would put 40,000 into high interest accounts (would split it between banks just in case)

and I would use the remaining 10,000 to have a holiday (with nice new holiday clothes!), buy a small car, oh and hire this place for xmas for all my family! mountain bear lodge

for me - put towards payment for a house as ex shithead of a partner is going to sell the house from under mine and dd feet and bugger off somewhere dar far away - on a more practical note for you consider the IHT issue (potentially) as someone has allready mentioned its not free from IHT until 7 yrs after gifting....

I would put it towards my mortgate/into the general fund.

pay mortgage
put a small chunk in for each of the kids.

Money saved would go to savings

and possibly an overseas property that I could use for holidays/to let out.

Oh, and take VERY good care of parents so that they live a long life. Also I wouldn't have to pay inheritance tax

One thing I'd like to do is to set up a trust fund for DCs education. I think I'm right in saying it would keep the funds out of our inheritance tax net too (after all people can die relatively young from all sorts of things). Also it ringfences the funds from us - which is a good thing. In terms of what should the funds be invested in, I think I'd like to a mixture of cash and a sensibly managed fund.

What a decision! It wouldn't pay off our mortgage so providing it earned more than the interest we paid on our mortgage I would put £90000 of it in a high interest account (for when we are ready to move) and spend £10,000 on a nice holiday, re-vamping our current house and a few treats.

Question for OP: are your in-laws the type who are likely to take an interest in how you use the money? How would they react if you used some of it for pure enjoyment (ie, nice holiday, etc)?

Agree with others that you should use it to secure your future in some way - down payment on house, or paying down the mortgage probably best.

Put a deposit down on a house or buy a caravan for us to live in so we wouldn't have to keep moving around.

After housing costs, I'd put it in pension funds so dh and I can live disgracefully in our old age.

I think Earlybird makes a good point actually. The trouble with "wasting" the money on stuff like a good holiday is that even though the money is a gift freely-given without any strings attached, there might be an expectation that it will be sensibly invested.

Or of course there might not - depends on your PIL.

I don't know if my PILS would mind that much. They gave my DH & his 2 sis about £70K each a few years ago. We squirrelled ours away, whereas 2 sil blew it on hols, shoes, handbags etc. I don't know how PILS felt about it, but I know I would feel uncomfortable just blowing the money. I think its because I recognise how hard they had to work to amass the money in the first place. They needed instant access to some cash last year, and we were able to give it back to them, but sils said they didn't have any.

I like the idea of an education trust fund. My 2 DC are both very young, but I don't suppose I would have an awful lot left over from £100K if I put them both through uni for 3 years today, so it is a good idea to invest it for the future. How do you go about setting up trust funds? I'm not that keen on putting money in their names unless it would be 25 before they can access it. 18 is too young IMO

Racing Green 4 Oven Aga

Mortgage
Tracker Isa

Racing Green 4 Oven Aga

Yikes.

Am depressed at all the "pay off mortgage and then invest the rest" answers...

Pay it off?
rest?

Pay off the mortage

Don't be depressed - you obviously live in a more expensive (nicer?) place than the rest of us!

lol FallenMadonna. There wouldn't be any 'rest' here either.

Stella, yes please

Pay off your mortgage - I know you think property is risky but in the long term it is a good bet. This assumes that you don't have plans to move in the next few years or until this current property downturn is over.

If your PIL need to give the money back again you could always remortgage and paying some off would improve your monthly cashflow giving you more to save in the course of the month or to spend on treats.

I personally would use half to pay something off the mortgage and the other half would pay for DS1 to go to private school from 11 -16. We have enough time to save up for DS2, with him being that bit younger.

Nice dilemma to have though.