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?

I would tell them when they are thinking about uni, in case it affects their decision to go or not, plus whether to take loans etc. £300k is great and will cover eg all uni costs plus a really good house deposit but it's not so much that won't be motivated to work. If it is discretionary, who are the trustees? Would suggest it is paid out only for costs of education and property.

Similar story here.
They knew about the money from probably early teens but had no interest in it. It was presented to them as money for the future to buy a house.
We moved the money about for them and they moaned about having to go into building societies or complete forms etc.
Not all teens are the same

Mine will have a similar amount. I don’t think it’s enough to demotivate tbh, not like a Paris Hilton type trust fund. I assume mine will avoid going into debt to go to university and have enough to pay a decent deposit on a house. There’s no need to lie about it and I’d be consistent re when they receive the money unless there’s SEN involved or it’ll create resentment if one receives their money at 18 and the other at 21 or whatever.

Can it be stipulated that it can only be spent on certain items so it’s not frivolously spent

I would say 25. My son turns 18 next year and i’m dreading him receiving his child trust fund. He’s currently into tattoos and motorbikes. I wish I could keep the genie in the bottle for a few more years.

We have trust funds for ours and we said 25. Surprisingly both wanted us to help them manage the money and neither has frittered it away. One used a good portion for a decent flat deposit (zone 1 London) and the other is considering buying. Both have knuckled down to careers though one had a false start and changed career. However many people do that! I’d tell them at 16-18. Both ours took university loans and one paid it off via earned income. Other one doesn’t earn as much and doesn’t pay out much every month so degree very cheap so far! It’s not debt when you aren’t required to pay it off! It’s an earnings tax.

I think FIL would quite like then to know really. I’m more concerned. We are the Trustees and he has said it is totally up to us.

I quite like the ‘GGD has put some money aside for xx
purpose’ and the optics are controlled.

I think that telling them is the right course of action. Even in trust it’s their money really, and it would also be nice for them to thank fil properly.

I like your plan of explaining to them that it’s for x, y or z. If it’s a discretionary trust then as trustee you can limit payouts to those purposes. So, for example, you might allow uni fees at 18 or house deposit at 21, but wouldn’t allow money for clothes and beer at those ages.

If you’re worried about the amounts, you could also consider asking for any future gifts or inheritance to go into pension for them.

It’s an incredible gift don’t over think it , it could spoil it.

Ultimately your DCs work ethic, motivation, drive, passion etc is down to them and your parenting.

What a lovely safety net to have to know they can have driving lessons/uni/a deposit/travel/or something like private health care if needed.

Personally I’d tell my children that their granddad has given them money for their future but it isn’t to be wasted.

Well time to start educating them then.

I think that’s easier said than done. I knew I was poor, it was bloody obvious. My kids know they are well off, it’s just as obvious. Lectures on appreciation aren’t as effective as being poor.

I think I would say that that grandad had given them the money for deposit on their first home. I wouldn't say any amounts so it could be 20,000 or the whole lot. I'd be very wary of telling a lazy child they had money waiting for them! I would want them to thank their grandfather though.

I would lie. Tell them they have a trust fund set up to help pay for uni costs and a house deposit as and when needed. Don't tell then how much. Say it explicitly states the money can only be used for these things, until they have full access at 25.

100% agree with this. That's one of the reasons I wouldn't tell them about the money. Let them experience working PT while doing uni and living in a flat share or trying to pay for driving lessons. They will learn through experience x

I wouldn’t tell them anytime soon. Maybe that grandad will give them some money towards their first home, or first car etc.
My MIL left my children £10,000 each. My youngest used some of hers for driving lessons etc and has saved the rest but my eldest left their job (for other reasons really) and spent his on travelling and weekends away etc.
My father didn’t specifically leave my children anything when he died but we’ve earmarked £10,000 each to them but we haven’t told them and I won’t until the eldest especially, wants to get on the property ladder or similar. Travelling is great but he’s mid 20’s and still at home and he needs to start adulting lol!

You should respect his wishes then. Tell them both when the older one is 18 and work together to ensure they use it responsibly.

Depending on the terms of the trust, it’s quite possible for this kind of lie to eventually be uncovered by a beneficiary. That could really damage your relationship

The GP has said the parent can determine the trust terms. That's what she's asking advice for. Once the OP has made a decision she could even ask for that to be written into the trust by GP.

Also, if I found out my mam lied about money in trust for me (in this way), I wouldn't be mad. I'd be happy she didn't let me squander it in my teens x

We are giving both grown up children a hefty house deposit. I have told them it’s for a house. Nothing else. Basically they cannot have it unless they are looking to buy a house.

They are fine with this. I am really strict with this. If they want the money for other things then they need to earn it seperately

I was fortunate to get money from my grandparents at various points from 18-30 and it was always very clearly for something specific, laptop, car, wedding, deposit. The last large amount wasn't released from the trust until I was 30.

It's a bit different with an amount as high as £300k because knowing you have that behind you could make a big difference to your plans. Gap year, do business at uni because you've got investment to start your own, apply to unpaid internships because you have living costs covered etc, choose to live in a different part of the country etc.

This is very interesting and a different take than I had thought about. Emotionally I can’t quite help feel that would ‘waste’ it, but intellectually, you’re right. Food for thought.

I am going to ask GP to write a letter of wishes.

That's a really good idea. Once it's in writing, so to speak, I would feel a lot more comfortable telling the DC they have something in trust but these are GP wishes regarding it. Should minimise any blame/resentment/argument etc. Not that there should be any of that anyway x

I don't know how old they are (apologies if you said and I missed it), but over time, if well invested, the money available when your DC come to access it should be a lot more than £300k each. They'll definitely be well-off for the rest of their lives if they understand how to use their money well.

It isn’t about being well off or lecturing about appreciation , although that helps , it’s about teaching them about the value of money , saving for stuff and not getting into lots of debt .