Serious Question: how old do you think children should be before inheriting estate ?

[Twiglett]

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For those of you with 'shed-loads' of money make sure your solicitor is clued-up about Inheritance Tax. If not I would encourage you to consult an Independent Financial Adviser before drawing up wills, in order to make the best provision with regard to IHT.

I think the threshold for IHT atm is about £270k, and everything over that level will be taxed at 40% ... but there are ways you can get around it.

I'd say 18 - clearly I'm out of line! Don't know if it's possible to give trustees a chance to continue trust until 21 or whatever if there is urgent reason to do so (drug addiction, membership of cult etc).

How, roisin?

DD will get a payout at 22 regardless of whether we are dead or not. If we die she'll get sole control at 22. This is because I have inheritance money tied up(could ask for some now, but won't, on principle) and it does annoy me that because of the way that family trust is operated it funds my stepmum's boobjobs (no questions asked)but I'd have to go on my knees to get money for a new roof etc. TBH unless you're talking millions (which DD won't be getting!) the extra £20-50k can make a huge difference when you're starting out but just be "nice" when you're older. but then I was all responsible with DH, DD and ortgage at 22 so I would think that!

Here's a real life story for you....my cousin inherited a significant amount of money in her mid 20's. Up until then she had worked, and lived a comfortable but fairly modest life. She was not in debt, and lived responsibly within her financial means.

Then she inherited a life-changing amount of money. She quit her job, bought a very expensive 2 seater German sports car, bought various pieces of diamond jewelry, did a beautiful addition on her house that cost more than the house itself, bought a painting she saw on the cover of an interior design magazine, commissioned a nationally known artist to paint a mural on the wall of her bathroom, had a boob job, bought herself a few 6 figure handbags from designer shops, bought quite a few designer clothes/shoes, took a first class trip to Australia/New Zealand/Bali, etc, etc, etc.

Did she have fun? Definitely. Did she waste alot of money? Depends on how you define "waste". Some of it could be considered an investment. Now she's 10 years older and has one child with another on the way. Her priorities are certainly VERY different now.....and the money is virtually gone. I don't know if she regrets it.....I wonder.

Bit of a scary story, Earlybird. However I know that I would never have done something like that in my mid-20s. I hope I'm raising my children to be responsible too.

I got the income at 21, capital at 25 - and I still have most of it 20 yrs later! Another member of my family has spent theirs!
I am doing same for kids - in a discretionary trust with dh and a solicitor as trustees within IH tax limits

Twiglett - I'd go with your 'rethink' - you seem like an eminently sensible parent to me and you're kids will turn out great - however I do think 21 is too young to get it all in one go - plus it makes sense to spread it out - we all need a windfall at different times of lives so I think thats the best idea.

Yes twiglett, there are lots of long stories about the stepkids (or more importantly the evil stepmonster). The money that dh and I have is mostly mine (from 1st marriage, parents and hard work and investment) so I want it to go mainly to my children. The sums to the step children are symbolic of what dh might have saved on his own if he had never met me. Despite my best efforts to help my stepchildren get a good education, I have been thwarted at every step of the way by their mothers. I think it's highly unlikely that they will continue their education beyond the age of 16 if they even reach that (my ss has already been permanently excluded from his school at the age of 10 and one of the sd's had been at 4 different schools in the last 6 mo.). I therefore decided that the lives that they are leading at the age of 21 will not be substantially different than the lives that they will be leading at 35 and a small sum of money would probably be useful to them at that age. I don't know if that all really makes sense, but the solicitor didn't seem to think I was a loony for suggesting it. And I couldn't really think up a reasonable alternative.

By the way, you'll be happy to know that ds has recovered from your molluscum, but the bad news is that dd is dying from them now. Please send compensation check immediately and I will hold it in trust until they are 35.

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I don't know much about inheritance tax but I think what rosin was getting at is that there are simle ways to avoid inheritence tax.

One of them has something to do with gifts. You can "give" things of value to the people who are going to inherit them before you die. I think you have to live for a further 7 years (!?!?!) but if you die after that they don't have to pay any tax on it as it's classed as a gift.

I'm sure there are lots of other loop holes that a financial adviser would be able to tell you of.

We have gone for 25. After all, trustees can release money as needed for house and other 'worthy' purchases. By 25, you have had sometime to really learn about money/life/work whereas at 21 may still be at uni....

Well I inherited bits and bobs of money from grandparents all dying before I was 15 (about £10 - £15K I think). It gave me a real understanding of money as my parent insisted on it being invested (in my name) and once I hit 18 it was mine. What did I do then? Well I spent the interest on my gap year travels and a small (very old) car and reinvested the capital. Finally at 26 I used the capital as a deposit on a house. I was sensible enough to do this, without being 'told' what to do. Therefore give your kids some credit, what is wrong with a bit of cash at 18??

My parents are still alive now (I'm 35) so by your reaconing I should get the money if they died, phew I'm counting on it to pay off my mortgage!!!

crunchie, I think that it makes a difference what amounts of money one is talking about. I think there is a big difference with £10-20K and many millions. Bloss, I agree with you that early 30's is generally a good time to inherit because you really need the money then for houses etc. That's why I've put in the abillity to take out lump sums in advance for things like houses, education, starting a business etc. Or one can always do what my parents did which is give me a chunk of my inheritance early (ie before they die) in order to help buy a nice large house that I could never afford on my architect's salary.

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If you don't want them to go mad and blow the whole lot on booze, drugs and fast women/men then 40 would probably be safe!

Dh and SIL were 'left' £15k each by their grandad. Actually money left to FIL on their behalf, but no trust, so he could have spent it on himself if he'd wanted. When Dh was 22, he asked FIL for the money so we could buy our first flat (£15k was a BIG deposit back then) and FIL said Ok. Without the money, no way we could have bought. And if we'd waited a few years, would have had real problems as first-time buyers with prices having risen steeply. So it worked for us. SIL on the other hand... FIL disapproved of her dh so didn't give her all her money when they bought a house. After he'd died (unexpectedly) turned out he'd spent the rest buying a car! I'm sure he planned to give her the money at some stage, but gave us real problems sorting out his estate; not sure SIL ever has had her fair share, tbh.
Not sure this ramble helps really, except to say don't tie it up too tight just in case they really do need it.

God I have been written out and x2b written in so I will be getting naff all anyway!!

We are yet to make a will but I think maybe 30 would be the ideal age with like other money being released for things like college/university/housing deposit beforehand.

I would say 30 as well.

I know a family where the 3 very promising children all inherited a million quid on their 21st bdays.

Two of them are ok but have no moral fibre and don't seem happy. I believe this is because you don't get the same joy out of things if you don't have to strive for them a bit.

One of them got into drugs and died of an overdose.

I think if you give it before 30 you are interfering with the natural process of having to make your own way in life. OK it's different for different people and some may be sensible enough to inherit a lot of cash at an early age and not ruin their lives. But it's not a risk I would care to take!

SA, True, many millions would have been different. It just didn't occur to me we were talking millions!!

CD that's basically what I was getting at. My parents brought us up to value money and to treat it like something to be earned, not automatically owed to us simply because our parents are rich. I was never told as a child that I couldn't have something because we couldn't afford it, instead I was told that if I couldn't have something it was because it was an inappropriate extravagance. I remember very clearly when I was at university asking my parents to borrow money to buy a car. They said no as I didn't need a car, but soon after loaned me a much larger sum of money to help start a business.
I will be lucky enough to inherit large amounts from my parents, but despite that I would never dream of not earning my own salary and living essentially within the means of that salary. I think that makes me feel better about myself and helps give me some purpose on this earth. I wish the same life satisfaction and purpose for my children.

By the way, Twinkie, I think it's also important to think releasing sums of money for something like starting a business as well as housing and education. I know that starts complicating things, but I think it would be a pity to cut off that type of avenue.

Have just finishes our will so this was useful,
went with 30 years, car at 18, tutition fees, house deposit of 20% and an all exs paid ski trip for the 3 of them to be taken together each year in Zermatt.... well if I can not go!!!