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.

Would she agree to 2/3 going into trust and a 1/3 to go directly to him?

Ultimately she can do what she likes and you are catastrophising a bit.

Take the good advice you have been given. My DC had a sum of money I had to give control of at age 16. I tied it up in investments, in his name, before his 16th birthday and we had a good chat about what was sensible to do with it. He understood the consequences of withdrawing and spending the money, and apart from treating himself to a MacBook it’s all working hard for him. He’s going travelling when he leaves school but got a job to save up for it. He’s knows his lump sum could be a deposit on a property, or wipe any future student debts, but he’s leaving it invested for now until he decides what’s best to do with it.

First, your DM hasn’t apparently entered the phase yet of high care needs. With care homes starting at around £1600 per week, a few years of care will deplete the estate.

Secondly, you are absolutely correct and your mother is rather naive. I have seen many people of this age inherit considerable sums and it was usually problematic. To the point that I insisted my own parents leave the money to my children in trust until they’re 25, available to use before that age for either education or property.

DM sounds strong-willed so may not be amenable to reason. I would just do what a friend of mine’s parents did which was insist that the amount went into property immediately.

I would try to reason with her again to delay the age he were to receive. Maybe she could stipulate a smaller % at 18 and the rest inherited at 25. There is evidence the brain matures at 25, however it is also stated it is early 30’s.

How about opening savings accounts through his childhood, not necessarily with huge amounts, but different types of accounts and talking through them, maybe taking him to a high street branch of something to put cash into a child account, showing him online savings etc, and just getting him used through his childhood to the idea of spending some money and keeping some in savings? And of savings for different purposes.

From about 11, he should be able to have an account with debit/ATM card access - Nationwide offers such an account plus a linked instant access savings account at 5% interest (on a limited amount of money - up to a few thousand). Other building societies and banks and newer financial providers offer similar things, that are an opportunity to learn about savings etc before getting control of that big lump sum.

When my first husband died, the court put £25k from the insurance payout into my younger son's name (the older two got nothing but I gave them the equivalent amount from my payment). It was given to him when he was 18. We talked about savings and put it into a savings account but unbeknown to me the bank gave him a debit card he could use on that account. He spent it within a year. I have no idea on what - he was in high school and didn't seem to me to be drugged up. I had earlier written to the court begging them to hold on to it at least until he was 21 but they said they couldn't do that as he was legally an adult.

OP I hope you can persuade your son to put the money into some form of investment he can't liquidate readily, because I don't think my experience with my son was an unusual one.

Thank you to all who have commented. I sincerely hope he grows up to be a sensible lad and any money he receives is put to good use.

His whole situation is incredibly unusual from a financial perspective.

He is an only child so will inherit everything from DH and I. In addition to the inheritance from my DM he is also the sole beneficiary of both of my siblings wills as they have no DC. I’m hopeful they are still around to see him as an adult and of course that will mean his likely to be older and hopefully more responsible to handle their money when it reaches him.

We are older parents, I’m late 40’s and DH is early 50’s. Siblings are older and have no partners or DC of their own. This means DS on top of his share from DM will also eventually get all assets from 4 other people, me, DH and both of my siblings. He’ll end up with 3 houses plus other assets which will likely add up in total to well in excess of £3m. Due to our ages he’ll likely have most if not all of this by the time he’s in his 30’s.

It’s the result of a very unusual family structure and will put him in a financial position that is a million miles away from anything that the rest of us in the family have experienced.

I never really thought about it until siblings started to confirm intentions and reality dawned on us. I just hope he’s a sensible sort and benefits from it all long after we’re gone.

Is there any possibility that your siblings might change their wills once your DM’s will is in place? When I was single I had the provisions for lump sums in my will to nieces and nephews with the rest to various charities. Once I had kids and made a new one I dropped them as they’ll be left money from their parents.

Maybe your siblings could go the opposite if you are worried?

If you are all well off why is she not leaving to you too then, and you could give to DS when you feel the time is right? Honestly your mother is being completely unreasonable and also controlling as you’ve told her your concerns and she doesn’t care. There is no way in hell I’d want my DC to inherit such a large sum as a teenager. I think about what I would have done if I’d had such a large sum at 18 and shudder at the thought!

She isn't being controlling she can leave her money to whoever she wants. It's not for OP or anyone else to tell her what to do with it.
At 18 he will be an adult. Why assume he will use the money to waste his life?
If he is allowed to grow up and helped to make good decisions there is no reason to asume he will do anything stupid with the money.
If I'd had a large sum of money at 18 I would have made much better education and career choices.

It's not a guarantee. But hopefully he will be a bit wiser at 25 or even 30. Eignteen is far too young for a large inheritance

But that can only happen if all the beneficiaries after an executor can't just decide to change the will because they don't like it

lol they are toddlers. Simply dont tell them until they are 25

My 3 adult sons (early 20s) inherited a lot of money each 2 or 3 years ago. I stupidly did not pay attention to what they were doing with it & 2 of them frittered a huge amount away - think American cars poor decisions etc. One of them thankfully was more sensible & invested his share. I asked the other 2 to hand what was left back to me & I invested it in long term bonds for them. They were very grateful, as they were shame faced about how much they wasted of their inheritance. I totally blame myself for not giving them better advice initially.

My advice is to prep your son fairly early on about investments & savings so he understands the importance. Yes let him have that lads holiday using some of the money, buy his first car & insure it, pay his way through uni, see some live bands. But he won't need £400k to have the best teenage & 20s life, that will come from memorable life experiences. He will be extremely grateful that when the time comes to buy his own place, then he'll be able to.

My 19 yo will inherit all from me when I die. I hope it won’t be for many years but I trust him and felt no need to restrict it. I hope he will enjoy some of it and travel and will still have plenty left for a house. My parents wrote into theirs that I couldn’t sell the family home until I was 25! They were not keen on my boyfriend at 18. I was over 40 before I inherited. It’s a worry now as you never know how they will turn out but educate your son about money and hopefully it will all work out.

They own lots of land, that generates lots of income. My friends get the income and can live off that, but they are not able to sell off all the land because it’s important to the family legacy that it all stays together as an estate. The trust structure means they can’t sell it but can receive the cash income to fund their lives.

Because that is the legal structure of a discretionary trust. The trustees decide at their discretion.

You joke about the cats home but this is actually what the OP has said she’d prefer! She’d rather him inherit nothing at all than have the amount when he’s 18.

Yes I do understand that it is allowed I was really just pondering why. It just seems crazy to me that I could inherit money and someone else have control of it.

You need to speak to a reputable financial advisor not Mumsnet because
A) this needs to be protected probably via a trust. There isn't a one size fits all you can determine the terms of the trust so it works for you.

B) it needs to be invested correctly. DS is only very little ATM and by the time he receives it it will not be worth the equivalent of the 300-400k it's worth today.

Please get proper advice, not just from the solicitor drawing up the will, if there is one. Trust law is a specific area of law so you need someone who really does understand trusts. Plus it needs the ability to be invested in some way by the trustees, this can be low risk so that he gets something close to today's value when he's an adult.
Good luck.

Ah I thought you were questioning the legalities of it. I see what you mean. Yeah I guess it’s because people are aware large sums of money can make some people make stupid decisions. I know of someone awarded a large payout after an accident left them unable to work. The payout is in trust (controlled by solicitors) and they determine how much she is paid out each year. It’s their job to ensure the money lasts for her lifetime even though she has full mental capacity herself.

If we die our teen children will do very well. Our will says the money is to be in trust until 25. Some financially sensible friends are trustees. They will let them have living costs/buy a car/flat etc but not put it all on black in vegas.

18
do you honestly think an 18-year-old has a financial maturity to make the best decisions?
even a smart one?

OP why is she so adamant your dc gets it at 18?

Would she consider leaving him £100k outright, which would give him a lovely start to adult life and get him through uni...and putting the rest in trust until 25?

Otherwise all you can do is try and educate him as best you can. Tbh my daughter was much better with money at 18 than I was at 25 so there are no guarantees an extra few years will make a difference anyway.