11 year old has inherited a lot of money

[Jessica8282]

Hi there,

I can’t quite believe the position we’re in, which I know is incredibly fortunate. I feel bad for even feeling it’s a problem.

However my son has just inherited a large sum, we won’t know exactly how much for a while, but at least £150,000, possibly much more.

Rather than this being amazing news, I’m now worrying a lot about how this will shape the person he becomes.

My background is not an overly prosperous one, in-fact I spent large parts of my 20s and 30s in considerable debt. So I’m finding it hard to process this news and the impact it will have on him.

My questions are, can I postpone telling him until he’s older than 18 (I.e 25) or do I have to tell him once he’s 18? I can’t see how having lots of money can positively impact his growth as a person.

My second question is, do I tell him soon so he has time to process it and let us instil in him what that money will go towards, i.e a house (and it not feel like a huge money splashing celebration when he’s 18). Or do we wait so that he has at least has some time in his life of having to think about how he’s going to make something of his life without having loads of money?

Also, just any general advice on how to handle this situation to ensure he still grows up to be a nice hard working person is greatly received!

I just keep thinking how being a poor student really taught me the value of money, and how he’ll miss that experience. Which is crazy, I should be over the moon for him!

Invest it. Tell him its for a house.

When he is 18 sit him down with appropriate papers to reinvest and lock it up for another few years. Present it as a given / hygiene factor.

This is what my parents and friends parents did

Depending on jurisdiction, expert lawyers may be available to advise but if in England and Wales, www.thegazette.co.uk/all-notices/content/103941#:~:text=A%20beneficiary%20of%20an%20estate,and%20gain%20full%20legal%20capacity.

FWIW, the executor handling the estate will be familiar if a professional or have to become so.

Wow great house deposit. Friend of mine was left a similar amount at 13,her mum bough a 2 bed house and they rented it out,saved the rent money plan being they would then sell the house too but instead they bought another !

Tell him that if he works hard and gets a good job he will be able to afford his own home earlier on in life. £150k won't get you much house by then you'd have to get a mortgage and for that you need a job.

Start educating him in money sense now.

If he does get a house make sure he knows to ring-fence his deposit with anyone he buys a house with. Same for if he gets married.

I probably wouldn't tell my 11yo.

Equally don't get too invested in what you think he should do with the money. If he wants to use it travelling and buying his girlfriend handbags you're best to not get too hung up on what you want him to do.

Do you have other dc? Do you need to make better financial provision for them.

Another thing you could do is tell him to pay for uni with the money and a car and driving lessons and then you can save the money you would have spent on these things for when he does need a house deposit.

I’d tell him now in a child friendly manner, ‘ there will be a bit of money to put towards a house when you’re older’ i wouldn’t hide it from him, it’ll seem a big secret later on.

I’ve told my 11 year old he has a trust fund. He’s autistic and was panicking about where he’ll live at university - he’s very keen. He was getting in a right state, so I sat him down and very carefully explained that there will be money to buy his own flat when he’s studying so he won’t have to share.

He’s not mentioned it (or the panic!) since.

I would speak to a financial advisor and a solicitor and I would buy a property on a buy-to-let mortgage for him as an investment.

£150k is meaningful now. It may now be in a few years.

The only reason I suggest this is my DH & his brother were in a similar situation. Their parents did nothing with the money. It sat in the bank. What was a significant sum when inherited (£20k each in 1982) was not a great deal in 1998.

BIL bought a small flat aged 18 (he is much older) DH partied it away when he was 18. Our financial circumstances are now very very different down to that £20k.

I still cannot believe my in laws didn’t invest it for their children.

I don't hold at all with the 'common wisdom' that any young person given large sums will do something stupid and profligate with it. Unless it's an exceptionally large lottery-style sum, I think most will use it wisely.

It's all in the preparation, really - I'd lay the groundwork that a good sum is coming and they will be in the lucky position of being able to buy a home.

Agree with all this.
It's your job to teach him the worth of money and financial management. Don't rely on school and don't just assume a financial advisor will help him.
We did this with our DC from an early age. We made wills that left everything in trust until 25 but changed them once it was clear both DC were level headed and financially savvy.
As we're not dead yet, we gave them a decent lump sump at 18 for a house deposit. They invested it and have used it as intended.

My DH inherited similar at a similar age. He chose to go to private school for A level which got him into a much better uni than otherwise and then set him up for life.

I'd tell him and give him time to think and plan for the long term. Finding out suddenly at 18 would be harder. 11 yr olds can be v mature and conservative (more than 14 yr olds) so best start discussing soon. Read the money pages of the newspapers together for example.

And do emphasise that he should not tell friends. Their attitude could be unhelpful- either grabby or treating him differently

Well, clearly you need to know the full legal position on this but the idea that he might come into a huge sum of money in seven years time is unsettling. It would be so easy for him to fritter it away on youthful pleasures - not that he shouldn't enjoy it - and possibly friends knowing he had a load in the bank.

If it was possible to buy a house now as an investment for him that he could either live in, rent out or sell when the time is right then that may be a way or preserving the value of the inheritance or even increasing it. I don't suppose it can be in his name at 11 but a trust can be set up.

Perhaps a proportion can be ring-fenced and some left available for fun - travel, a car, hobbies.

I inherited money at 18- about half of what your son will. I knew about it growing up and my parents took me to the banks financial advisor and we invested.

I would say tell him early and look into teaching him really good financial habits. Get him a really good financial advisor and try to set it up that he either puts it away or gets a monthly stipend once he's 18.

Sadly my financial advisor was terrible and I had no idea how to manage money. It did mean I had two gaps years and finished uni with no debt (although pre- fees times anyway), but I really regret the fact that I didn't have good guidance along the way. I would consider that the only big parenting fail of my upbringing.

It's a double edged sword. Your DC is exceptionally lucky as this could set him on a different path in life - it could pay for Uni or be a good deposit for a house.
A friend of a friend inherited 7 figures at age 19 or 20. He dropped out of uni, bought a huge house in London (where I know him from legendary parties), a lot went up his nose. It ruined his life. He did lose the lot in the end. But that's a very different sum of money. He was bright, well-educated from a boring MC family.

Who did he inherit it from? If it's someone you were close to, I'd tell him they told you it was for uni accommodation and a deposit on his first home.

It all depends on the terms of the will, they can't be altered after death, and you can't do deeds of variation when they adversely affect a minor ie decreasing the amount they get or changing the age of access. It also depends who is trustee, does it allow for spending on education or health, does it say specifically when young person has the interest and when they have access to the capital. How many people know he has been left money, will he be told by someone else, A trustee is duty bound to invest it wisely and preserve the capital, if it is in a trust how is it set up and with what conditions. Some trustees will start to involve the young personnel decision making before they inherit so they understand the logistics of it. I read somewhere that banks now will generally not allow you to tie up money in bonds etc that expire after the date of transfer of capital so you can't put it in a 5 year bond when they are 16 and due to inherit at 18, you need both financial and legal advice for such a large sum.

you need legal and finacial advice. I suspect that with a conversation with the executor it could be put in trust for safekeeping and dependent on the view of the executor possiblywith input from yourself it could be put in trust till a later age. But that may be challengeable by your Son once he is 18

@legalseagull

I would tell them - you've been left money to buy a house. Just so they grow up knowing that's what it's for

Yep this is sensible.

You need legal advice first, and then investment. It may or may not be possible to lock it up till he’s 25 (doubt it) but you could perhaps invest in such a way that it it would be foolish to break it early. Most likely a neutral party eg the relatives solicitor will have to act with you on investments to protect his interests.

Try to view it as a positive - especially if we’ll invested, it will get him well on the way to a home, but that’s it. It’s not going to be hugely life changing - more a great leg up.

I think he needs to know quite early on and come to acceptance that it’s money that has a purpose. That way I think he’s far less likely to squander it than if he suddenly finds out at 18. It needs to be just another accepted fact.

This happened to me as a very young child, as a result of very sad circumstances. It was always instilled in me that it was "for your education and a house". Essentially, I got my inheritance decades and decades too soon. I was always told I should never, ever tell anyone about it, especially boyfriends, as they would only be interested in me for the money. Far from pissing it away, I turned out to be extremely financially cautious.

Bizarrely, my very young child has also been left an even more substantial amount of money, but in a much more convoluted and thankfully less traumatic situation. I will not be telling them about it until they are 18, and am spending the intervening decade teaching good money management skills and preparing them for a life of hard graft.

You should tell him and explain that you need to make sure he gets some excellent investment advice so that his money will grow and he will be able to have a home/ income/ pension in future.

He may lose /gain friends (wrong sort) if he goes blabbing! Tell him at 16 when he has taken his chosen steps for education..

I’d not tell him. My younger kids have just inherited a smaller amount. Invest it for him in his name (Junior ISA) and get him into the habit of saving and give him good mo DH education. Then when he’s say 16, and has more of a grasp of money etc, you could tell him there’s an amount going to be available to him when he’s 18 for (insert your here) house/training/help with uni costs/etc. Lucky boy!

A friends dd was in a similar position, she inherited a large amount when she was around 13yo.

She decided to use the money to go to private school from year 9 through to A level.

She felt it was money well spent.

*money education

Your really overthinking tbh, he’s still going to have to work .
At best it will be a good stab at getting him in the housing ladder. Use that as how you present it to him. You’ve inherited him some money which will help you a lot when your older to get a house, fund uni or start a business.

Who on earth would do this and not make an age stipulation on this? He's 11 years old. Any decent lawyer would have advised on this.