DC large gift

[Christmascakeforbreakfast]

My FIL has made a gift into trust for my DC. This is not the first so now they have over £300k each.

I’m worried about how this will make my kids behave and if it will seem such a big sum that they are not motivated to work hard (not that it is compared to a lifetime of work, but kids have no concept). I am to be made a Trustee and will be able to decide when they get it and indeed if they get told.

What do others think? Would you make your kids aware?

Not until they are 21, no

Dont tell them. No problem

If it is discretionary so they don't automatically get it at 18/21 then no I wouldn't tell them.

Don’t tell them. To be honest they’ll still need to work that’s not enough to even buy a house outright in most areas. Tell them when they’re 21 and they’ve completed their education. (They can then use some of it to pay off their student debt)

How old are they now? I wouldn’t tell a young teen but might tell a sensible older teen.

at what age is the money released to them? You don’t want it to come as a big surprise and make the child feel like you lied.

also, if older kid gets something, younger will know

When would you though?

Actually on reflection maybe tell them when they’re making plans for uni. If for example they have to live really frugally while studying then find out later they had a ton of cash that might not go down well. Like, 16? How old are they now?

It’s discretionary so no age limit

This is what I did. Gave it to them when I knew they wouldn’t squander it

DC17 and 15

I‘m not convinced they have any real concept of money now really. My DC15 is def money motivated but also lazy!

When the adult child

• is in a steady job proving themselves sensible
• in need of the money for other reasons

I wouldn't necessarily then tell them the whole amount either.

It so depends on the individual, but a youngster can be swayed or taken advantage of so i wouldn't tell until 21 minimum I don't think.

I would probably wait until they were through education including uni, and had started working into a career path. They'll hopefully be more mature and focused by then and will have a better grasp of the value of money.

Has your FIL spoken to you about his thoughts on the matter?

Its worth letting them know there is a nice trust fund for them for when they finish education. They might decide to use part of it to fund uni. £300k is life changing for a young adult starting out, but not enough to make them entitled and unmotivated I don't think.

I think if you keep this from them, at a time it would be helpful/they would have made different life decisions, when they do find out about it, you risk anger and estrangement.

Instead I would talk about it now but with limitations. So “Grandad has put some money away to help you on the housing ladder when you are ready to settle down and buy a house, but the trustees can access some of it early for you if you want to go to university and want to use some of it for fees to reduce how much you have to borrow. Obviously if you use some of it for uni or a different training course, you’ll have less for a deposit than your sibling will when they are ready to buy. We can help you weigh up the options and look at borrowing rates for student loans and work out if you’d be better off borrowing for higher education and still having the lump sum when you get a mortgage, or if you’re better off not having as much towards a first house, but no fee debt.”

I do think if you just present it this way, don’t entertain the idea it’s just their choice what they do with it, they may well never question the idea the only things they can access the money for are uni or house.

If they ask the full amount I’d tell them. But repeat it’s for buying a house, but you can access it early for education.

My children had similar, they had full access and full control at 18.

They have been completely responsible, understood their privilege and responsibility and behaved accordingly. Not all teenagers are the same, but they may surprise you.

Money is both an advantage and a responsibility.

My great aunt put everything in trust until the beneficiaries were 28 on the advice of a financial advisor.

Too old to blow it on daft stuff, still young enough for it to help with house purchase or career development courses.

They are old enough to know. They should already have got from their parents the value of work for its own sake, not just for money.

And it's in trust so they won't be able to blow it all on nonsense.

I think I would keep it from them until they were at least 21. Probably 22/23 tbh. Any younger than that and they’re likely to just squander/ blow it.

I may tell a white lie and say that grandpa has explicitly said it needs to be used for paying off uni debt and housing, so they’re not tempted to blow it on daft things! By the age of 22-23 they should have finished education and be in full time employment, it’s more of an age where they should hopefully make more sensible decisions

Just wanted to say how lucky your DC are!

What a fabulous start to their adult life.

Also good to hear a positive MIL story 😁

Well it is actually. We just bought a detached house for exactly that price, Midlands, the area is fine . I know lots of areas of the country where it's cheaper than that too. Of course I realise it would be different in the South East.

Can you decide what they spend it on, ie house deposit?

Don’t tell them.

I would wait until they were applying for Uni (if they do) and tell them that there is money there if they don't want to apply for loans for a start
Then if they were at Uni I would pay a monthly allowance
If they don't go to Uni i would wait until they were considering a major life event, wedding, travel, house etc and say that there was some money available for that

However I agree with not telling them until they're older. At 15 they would have no concept and might not work so hard at school etc.