How can I protect my son from a large inheritance at 18?

[Awkward718]

NC for this as it’s quite a sensitive issue.

My DM is in her 80’s and I have a pre-school age DS.

My DM has told me that she has written in her will that she is going to split her assets between her 3 children, me and 2 siblings, however my share will go direct to my DS as she considers DH and I to be financially secure and not in any need. My 2 siblings have no DC of their own.

The amount my DS will receive is likely be somewhere around 300k-400k.

I have no direct need for the money so am not at all bothered that it is being left for his benefit however I do have a huge concern that handing such a significant lump sum to my DS at 18 could have catastrophic consequences for him. He’s far too young at the moment to know whether he’ll be a responsible 18 year old or someone who could ruin their life if handed such an amount at a relatively young age with no restrictions.

Is there anything I can do to alleviate the risk? DM is adamant she’s doing a really nice thing for DS so won’t entertain changing her plans despite me highlighting the obvious risks.

Can an inheritance handed to a child for them to receive at 18 be deviated or not? I suspect it can’t. If so what other options are open to me as I don’t want to live through his teenager years terrified that he’s going to be handed what will then be a huge sum after investment growth on his 18th birthday.

If it can’t be deviated could we do something such as invest in joint assets with him as a child where both parties have to agree to a sale?

Failing that are there any other options? I’d honestly rather not have anything going to him than have this arrangement in place. He’s an only child so will inherit plenty from DH and I at a relatively early age anyway as we are both older parents.

Could you ask her to leave it in trust for your DS until he’s 25, if you think that’s a more suitable age?

I’ve tried that but she determined he gets it at 18. She wants him to have it as soon as possible. I’ve spent hours explaining to her how it’s an awful idea that could potentially ruin his life but she just dismisses any concerns. I genuinely wish there was no money for her to pass on. I feel totally helpless.

Are you certain that you are financially secure in all circumstances? My parents had a similar view (making gifts to my sibling but not me for similar reasons) but unexpected terminal illness and serious care needs have transformed that. IT would be awful to be in that situation and have a young child with funds that could have helped.

Would she reconsider? If she leaves it to you, you can always do a deed of variation for him if you have no such needs.

I totally agree with you about it being a bad idea. Also that potentially he could suddenly be richer than you. Also what if you had a surprise baby.

I totally agree with you, and it would make me really worry too.

I can think of worse crosses to bear. You can educate him as he grows up on how to handle it wisely. I think you’re being quite melodramatic and ungrateful tbh. Why assume the worst when it could be an incredible opportunity for him, with the right guidance? He could do something wonderful with it! Have more confidence in him and instead of worrying think about how you can provide the guidance he needs. (you’ve got plenty of time to get that covered.)

Very odd comment, so what if he’s richer than her?

I’d try and get her to stipulate it’s for property purchase so he doesn’t fritter it away . He’ll then need to understand he has to work to pay the bills and upkeep of said property.

If you think you might have another baby get her to put in the will that it is to be shared between him and any other grandchild alive when he reaches 18, if that can be done.

If she really won't change her mind then education is all you can do really. Also, has she thought through the tax implications? Does he have a LISA she could contribute to every year or could she fill up a junior ISA allowance for a few years rather than giving it all to him at once? Or start a pension for him now that would sit in the background and grow? I've no idea what's best but surely some kind of financial advice would be good. I think the best incentive for him not to spend it fast could be him seeing clearly how it can make him more money by being untouched till its really needed.

If she’s determined the only thing you can do is mitigate it by ‘educating’ him as he grows up that he has been left a sum of money for his education, his first car, and a deposit on his first home, and keep talking about the money in that context, or that when he’s 18 he’ll come into a sum of money and will sit down with a financial advisor to look at options for investing for the future. At 18 though, he’s an adult, and if he chooses to spend it all on mini eggs there’s not a lot you can do.

Realistically, there is very little oversight of the management of trusts, so your best bet is to ensure that you are the trustee.

If she passes before he turns 18 I would just tell him that it can be used before 25 for things approved by the trustees and that he gets full control at 25. And then don’t unreasonably block spending even if you disagree a bit, but that will just give you a safety valve against drugs etc.

If he has sufficient knowledge, interest etc to look up the will, find out the rules on bare trusts and argue that his money is legally his. Chances are that he is the sort of child who is safe to have the money at 18 anyway!

She's not putting it in a trust, she's refused

What id you have another child? You will have one rich child and one without. For that reason alone it should be in a trust.

I think you need proper legal advice. Where does she think the money will go between her death and your DS turning 18?

Has she seen a solicitor to draw up the will?

Sorry, I could have been clearer in my post.

If someone leaves money to a child under 18 then it automatically goes into a bare trust with a trustee who looks after it until 18

I totally understand your concern but if she really won't entertain the idea of putting it in trust until he's older - even 21 would be better - then you're just going to have to do your utmost to raise a financially savvy kid. I'm not saying that's necessarily within your control, but I do think you tend to only hear all the horror stories about teens and the majority are actually decent, relatively sensible young adults by 18 years old.

I’d share your fear - no idea how you put the brakes on it, if you can’t convince your mother to put ut in trust till he’s 25 - is she of sound mind?

There won’t be another child. I was over 40 when DS was born. There also won’t be any other GC for her as I’m the youngest sibling.

She has seen a solicitor and drawn up the will as I’m an executor which is why she discussed it all with me.

I’d be happy with that however legally it’s not possible. You can make such a request in a will but it’s not legally binding.

She is of sound mind but she really thinks she doing the right thing. I’m well into my 40’s and my siblings are both in their 50’s. All 3 of us are in fairly decent financial situations with mortgages paid off etc. DS is the only person see sees as in any need whatsoever which is why she wants him to have money directly. She was surprised when I raised my concerns regarding her intentions.

Not exactly. The executor is the initial trustee (so OP could try to be the executor). But if the executors want to discharge their responsibility before 18, which is likely, then any resulting bare trust needs two or more trustees because that route is governed by a specific statutory provision.

The other issue with your advice is that OP can’t falsely withhold the funds until 25. I realise the motive is to help her son but it’s risky and unlawful.

Send your son for financial training. A lot of places like investment banks do it.
My DD has been investing since 18 bought her first property at 19 (it’s basically a student bedroom) and has about 40k in investments. From the shares they own they currently get about 13k a year in income.

I talked to all my kids about investing and money. I explained about compound interest. Balancing your portfolio etc. I educated myself in the process.

The other DD is sinking it into her education which is unfortunate and unfair.

my 17 year old can’t wait to get to 18 and have his own investment account. We use scalable because it’s free.

Work on him not your mum.

I agree with others about educating your son about money as soon as he's old enough. Give him pocket money, show him that saving for things is important etc.

It's a lot of money and not ideal, but when he's older (teens) if you explain that he'll get this money and it's for uni and property for him, then hopefully that what he'll just assume that's what it's for.

Not quite the same as the amount is less, but I maxed out a JISA for my DS for a few years, which automatically goes to the child when they turn 18. He knew about it, and each year we looked at the compound interest and forecast how much he'd get if I was in a position to pay into it until he was 18 - and most importantly, I told him it was to cover all his uni costs. So he knew this was uni money (and saw how hard I worked to save it) so never assumed he'd have it for any other purpose. He got a little over £70k when he turned 18; he set aside £20k for year 1 of uni, and locked the rest in a high interest account for the remaining years.

So it's definitely possible for a child to turn 18 and use money wisely, but don't assume that'll happen organically, you'll need to do the groundwork to ensure it happens. Oh - and I made sure DS never told his friends about it, as I didn't want them to view him differently/feel inferior or treat him as a cash cow

I have this issue for a different reason, my child's father died intestate so my child inherited everything very young.

Trusts can usually be accessed if the money is to be spent on the child and is deemed in their best interests. Over the years I have paid for clubs, school trips, holidays (just the child's place of course) and activities out of it so some of the money has been spent. This is all evidenced with paper trail and as an entirely lone parent are things I'd have struggled to afford on my own. On the suggestion of a trustee I considered taking a regular sum to contribute towards bills and food but have held off as I earn enough to cover those. You may feel less comfortable doing this if you can easily afford them yourselves but it is a way to ensure some of the money is spent in a controlled way. Try to ensure sensible trustees who will protect the funds but allow reasonable access.

Otherwise though I'm quite sanguine about it. It's a good position to start adult life in and I actually believe it's a minority of 18 year olds who'd have so little sense as to spend it all, certainly not if they've had a basic financial education. You seem convinced this will end in disaster and talk of it ruining his life, unless you know him to be completely wild it's not rational to think like that. Worst case scenario many of us never inherit anything so he just goes back to zero I guess.

Kindly, but I think you are catastrophising.

You say your DS will get an inheritance from you so even if he fritters it all away, he will get a second chance.

A friend of mine inherited a large sum of money from a distant relative at 18.

He frittered it all away in 2 years on partying, holidays, rent, hash and a car. Did it ruin his life? No. As an adult with kids of his own now, he could certainly use it for more sensible things these days, but he's had a great life, went to university once the money ran out, got qualified in a subject he loves and now does a job he loves, met a lovely woman, had gorgeous DC who are now off to university themselves.

Yes, he was stupid with the money. He learnt some valuable lessons about friendship (who hassled him for money and who didn't) and has some stories to tell for it. Yes, it delayed him going to university, but he did well once he finally got there, it's possible that being more mature helped. I don't doubt that coming from a loving, down-to-earth family helped loads too. Give your self and your DS some credit, if you are bringing him up well, he will have solid foundations, even if he does go a bit mad with the money for a while.

What is it that worries you so much exactly?

Agree that good education and modelling of responsible money management is the way to go.

Also if you're comfortable, he should be used to a decent lifestyle, activities, possessions, days out etc so he probably won't develop the constant feeling of missing out and constantly wanting things he can't have that is more likely in a family that struggles with money.

Then when he inherits the money, suggest that you see a financial planner together so they can help him use the money to buy property, pay for education, driving lessons and buying a car, starting a business, pensions and investments etc to give him a really good start in life depending on what his interests and aptitude are.

Perhaps recommend a small percentage of 'fuck it' money eg 5% but make sure he appreciates its a 'sliding doors' moment.

He could set himself up for a really comfortable life, able to do just about whatever he wanted or he could blow it all in no time on drugs and fast cars and possibly end up broke or even dead if it all goes really wrong.

But a lot of is down to personality that all the good will in the world can't change. In my extended family there's a pair of teenage siblings that have had exactly the same upbringing, opportunities etc but one is a saver not interested in possessions, has loads in the bank because takes ages to spend birthday money etc, the other is a spender, constantly demanding money from parents and other relatives, wants expensive clothes, tech etc all the time, lives on takeaways, spends ridiculously eg gets a can of coke from the shop on the corner by deliveroo etc, blew their £3k child trust fund in under a month on nothing. So its the luck of the draw how your DS turns out.

I know this sounds bad, but when recently sorting a will out for DPs aunt shes left money to our child her great nephew. As it isnt in trust we get the money and are expected to give it to him at 18. You could decide to put that in trust? Only you can protect your son and know whats best.