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!

I inherited some money at 20, only 20k but in 2001 and at that age it felt huge. Sadly I blew it.
Please think carefully about what to do.

When he gets to 18 they will send a letter telling him about the account bla bla bla. I would intercept this letter and not give him the money until about age 25 or when you can see is sensible.

Highly illegal.

Honestly - you tell him he truth. He will have all the info anyway when he's older and will not like you lying to him about this.

Get urgent financial advice - get it locked up in a trust, so he can't touch it until he's maybe 21.

In any case OP, let this be an additional motivation to ensure he gets a good financial education.

Alvin Hall, Suze Orman, Martin Lewis, start off with watching accessible people like these.

Start making "get quotes for insurance renewal" and "budget for next week's grocery shop" part of his chores. Get him to research flights for the family holiday, best value broadband, which petrol stations are the cheapest.

Talk regularly to him about financial failures and succeses that you and others have had.

You can cover a lot in the next 7 years!

@OnlyFoolsnMothers

I’d get legal advice followed by financial advice. I wouldn’t give a large sum of money to anyone under the age of 25- and I inherited a few hundred thousands at 20. Look at trusts, maybe portion a sum aside for uni/ driving lessons etc.

If it wasn't placed into a trust by the person leaving it to him then it is his money to do with as he wishes - you can't take it off him to put it into a trust.

You need to look at the provisions of the will. My children inherited (much less than yours but still substantial) but the wording meant that the money came to me to look after and use for their benefit until 18.

They are small but know they have some money to help them with a house when they’re grown ups. When they’re older I will help them understand their investments and teach the about compound interest, financial markets etc. My aim is that they don’t touch the capital but once they’re 18 suggest they take income only and treat the inheritance in that way. Only time will tell if that approach will work but I think surprising an 18 year old would be a bad idea.

We have invested the majority but keep some in premium bonds. The winnings go towards fun days out but will also be available if they want expensive school trips or study abroad opportunities, need private medical treatment or other unexpected expenses for any reason.

I agree with some of the PP. 150k is a nice to have as a young adult to get on the property ladder but it won’t get you far in life (see how many posters on MN on 150k pa struggle to make ends meet and send their kids to private schools…). So he will still have to work hard as he would have had to do had he not inherited.
If I were you I wouldn’t make a fuss about it, I would make sure I continue to instil in him a good work ethic and the concept of saving and spending money wisely, as I would do with any kid, poor or wealthy, had they inherited or not.

Talk to a solicitor and see if you can put it into trust until 25 in a way you can countersign to release money for education, driving lessons and a set some at 18 weeks eg £5k for travel or a car

A lot of good advice, re not telling him until he's older plus telling him to keep it quiet.

I would encourage him to think of it as a house deposit, though in reality he can do what he wants with the money.
Definitely don't withhold after 18.

I really wouldn't tell him until he is 18 at least. Although people are saying that £150000 is not a lot it will be to an 11-year old.

You need him to work as hard as possible at school and it is difficult to do that that knowing you have a large amount of money coming to you.

It is no use to him now so there is no point in him knowing about it.

@Fcuk38

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.

It is decent sum but not life changing. It is in itself a lot of money for drugs but it is not a lot of money for a house. So I would be quite matter of fact that it is for those sensible things, not spends.

It sounds like you are careful with money. There is every chance he will be like you and when he grows up value the security that money can bring.

It needs to be invested properly but that may depends if there are restrictions in the will. It may be worth talking to a solicitor about the will and the to a financial adivsor if you know what is allowed.

I would tell him, he is old enough to be told about money. Only if you learn about it, you may not burn it the day you turn 18. It is perfectly acceptable to put some aside for a car or a holiday/party but you can install a sense of responsibilty as well.

DD is 14 and knows about student loans, cars, house costs. She will get a decent amount of money when she turns 18 and we hope we installed a sense of responsibilty in her.

How on Earth can a parent stop a child having access to it until their 25? Unless it specifies it in the will, surely it’s up to your child to do with as they please once they come of age. I totally get that you’re coming from a good place so don’t take this as a criticism. I just don’t understand 🤷‍♀️

My DS is in the same position with a bequest of over £250k (aged 9 at the time).

We've never hidden the money from him.

Rather DH and I have always stressed:

• this bequest was the result of lifetimes careful saving and investment and he is very, very lucky to be the recipient of such a large sum of money;

• he needs to respect the above and the legacy of the family member who made the bequest by being similarly financially prudent with the money re: investing it and spending it wisely;

• he should not disclose to anyone that he has this money. It serves no purpose other than to invoke jealousy or make him a target for someone wanting to exploit him. Obviously there may come a time when he's in a serious relationship when he wants to tell a partner but he's a way off that yet.

We've always supported and spoken to him about investing the money wisely, taking financial advice and encouraged him to make good choices.

He's now over 18 and he's not spent a penny of it and has no intention of doing so . Rather it's tied up in long term (5 year) investments and has appreciated in value a fair bit since he first inherited it.

Rather than having itchy fingers to spend it, he's actually very proud of his nest egg and is incredibly careful (though not a skinflint) with money in general. Definitely a saver and not a spender.

I think the years of investing and watching it grow have made him understand it's value and just how lucky he is and I think we made the right decision to tell him even at a young age.

I'd obviously like to think he would be the same if we had just said "surprise" on his 18th, but in truth I think he would have missed out a lot on coming to terms with it and all the careful investing.

As is he really feels a connection to that money re: where it came from a and the time he's spent thinking about investing it and I think that's definitely contributed to his prudent approach now.

*they’re

It might be illegal to withhold the money till he is 25 but is he really going to take you to court? I doubt it and I'd do it in a heart beat for my son's sake. I'd prep him starting now that he is inheriting money to help buy a house at some point in the future, no need to say how much, so it's in his head that that is what the money is for.

I'd tell him now. But only minor details, Aunty Sally died and she's left you a large sum of money, enough to buy a house. Leave it at that for the moment.

How is the money protected? Do you have access to it?

It would be good if it could be invested on his behalf.

Can you buy a house with it now and let it out so the capital is locked away? Any income from the rental property can be put towards university or driving lessons.

I wouldn't tell him just yet and maybe prime him around 16 of the fact that he has been left some money.
It would be great to put some of into a pension as this would build up nicely with interest, and saving for retirement is only going to get more difficult for the next generation.
ISA's invested in unit trusts would accumulate a good rate of interest too.
He will need guidance but its lovely to have money set aside for a house deposit already.
Maybe consider setting aside a smaller portion into a separate account/investment to spend on enjoyment and adventure.

set up a trust and invest....buy to let or similar....cash will be eroded by inflation...2 friends of mine inherited 500k each at age 18. [ 20 years ago so a lot of cash ]..blew the lot on some collapsing houses - sold for less than bought years later,... flash cars, huge trips to the usa....both now in small one bed flats out of london in small towns...its all they could buy with the money left....

I'd be looking at investing it for him in something safe and a modest yield that either allows a yearly dividend , or matures around the time youd expect him to be either starting, or finishing university.

One of the best head starts in life is getting onto the property ladder, for example owning a substantial part of a house, living rent free, or even making enough profit from letting rooms out as a house share could allow him to finish uni debt free and with the lump sum required to start a family and career wherever that might be.

I think all the posters saying to wait to tell him until he's 25 (or older) are being really patronising to their kids. It's important to teach your kids the value of money now, so that they have a decent head on their shoulders and appreciate what they can do with that money when they're older. At the same time you do have to accept that they might not want to buy a house with it - they might have all sorts of dreams they want to fulfil with it (studying, travelling, starting a business etc).

For now I'd just say that he's inherited some money which is being looked after for when he's older. Don't make a big deal out of it and treat him like you would have otherwise.

Some of the advice on this thread is just crazy. You as the parent will not be in charge of the money so forget any ideas of buying a property to rent out. You should make sure the solicitor is aware your son is a minor. When I was a minor beneficiary the trustees let me spend some money on university textbooks (with receipts). I saved the rest of the money and it went towards a house deposit years later.

I would tell your son he will be inheriting some money without going into detail. Emphasise it is for giving him some advantages in life like a house deposit. Ask him to keep this information private though as you don't want a bunch of user friends hanging round to help him spend it at 18.

As he gets older tell him more. Tell him about your financial struggles e.g. paying off debts, saving for a house deposit. Emphasise that he shouldn't waste the money. Tell him that you know he is a sensible with money so he has something to live up to. When he is 18 I'd be advising him to tie up the money in an investment for a few years even if it is only a term deposit.