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 received an smaller but still significant sum of money at 18. I spent a couple of grand on making my life at uni much easier and did some internships I couldn’t of done if I needed to get a part time job around my studies. Then I used the rest for a house deposit in my late twenties.

If my Dad had hidden the money till I was 25 I would have never forgiven him. It was my money and having the extra £3k to spend at 18 was a massive help! I’m guessing that was a gut reaction but the people who are suggesting it seriosuly are bonkers.

I have two substantial properties to pass to my two sons and I plan to pass one to them when they are 21 and 19. They are 15 and 13 now. I am looking into putting it into a trust so that i still have some sort of say. I haven’t decided on the finer details yet. I personally don’t worry about it affecting them as people as I think that there are enough poor kids in council houses nowadays that are entitled. It’s
A generational problem. It’s about how you raised them and how you model for them.

I was given some money in my early 20s and I regret wasting it so much!! Definitely try to control how he spends it.

@Twinkleylight

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.

depending on the terms of the will, you just can't "do things" with the money....and you certainly can't withhold it past 18 unless its stated in the will.

We (dh and I) got a small lump sum where we were 19. Thought it was smart because we lived together and it made sense to give us it…
We pissed every single penny of it away and I couldn’t even tell you what on.

If it was my son, I’d tell him he has some inheritance from X relative which is in an account to HELP with property, driving lessons and a car when he’s older.
Help being the main word, so there’s no assumption there’s enough for everything.

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 would be furious if my parents tried to do that to me.
It isn't their money to withhold, and just because they want him to use towards a house purchase doesn't make it the "right" thing to do. He may want to go travelling, spend it on moving abroad and living in house boat, get heavily tattooed,spend iton women & booze, or may just squander it.

It may well be that he decides to put it twoards University education, use some for a deposit on a house- but it wil be his money.
No one, not even his parents have a legal or moral right to tell him how to spend it.

I wouldn't completely hold off telling him until he was 18. I inherited a decent sum of money from a grandparent as a young teenager (held in trust until I was 21). My parents let me know that the money existed and that my grandparent intended for me to use it wisely for major life purchases (e.g. house deposit), not partying.

Knowing I had that money changed my choice of degree. Instead of picking the subject I thought I should because it would lead to a "sensible," well-paid career in a bank or accountancy firm, I picked the subject I really loved, and have spent my career working for charities and in the public sector.

So, I'd definitely argue for letting him know about his inheritance at an appropriate time, so he can factor it into his career choices.

I think your attitude to it suggests you should keep it a secret from him until he is 18.

He may wish to use part to fund university and part to buy a car. There’s £50k gone in a blink!

Coming out of university with no debt and then having a good deposit is a nice start in life - but not a risk start lifestyle. Many people are lucky enough to have this. Don’t talk it up too much in your head or to him.

And to be honest so what if he blows some of it on holidays and a silly car? I would and I’m 42😂.

@Twinkleylight

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.

Buying a property to rent might sound attractive, but it means she's going to have to do a lot of "landlord" legwork (unless she pays an agent to do this thus reducing the income).

She'll also have to spend some income maintaining the property (deep cleans between tenants, potentially even redecorating etc) and there's always the risk of a really bad tenant causing thousands of pounds of damage, the property going un-let or a tenant not paying and having to spend money getting them evicted (whilst not earning income).

Upshot - it's not easy money and comes with risk.

That's why she needs to get good professional financial advice and decide on a risk profile for how it's invested.

With DS we had a range of investments with different risk profiles and he's been lucky that they all paid off, but had some not, that would have been mitigated somewhat by safer ones.

Risk star not risk start

Ahhhh rock star

Trust fund it until he's 25.

I was left money which I was able to access at 18 and then again at 25.

You're very different people at 18 vs 25 and I wasted it at 18 at uni, shopping and going out whereas at 25 I was ready to buy a house.

I wouldn't tell him until he's older and it's relevant, along with lessons on managing money.

@Twinkleylight

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.

Take legal and financial advise before doing anything like this.

If the house is in his name (can it be in a child name?) then he can’t benefit from any first time buyer incentives when he actually want to buy his own house.

I would also be very careful investing on his behalf - what if it goes wrong? And can you legally spend his money?

Trust fund with wise growth and income stocks would be best. I’d not discuss it with him now; just mention he has funds to help him when grownup. He should have sensible hatchback, and driving lessons at 17, but also a part time job. Some should be released to pay student loans. Most of it should be saved toward a down payment on a house. At current inflation in housing prices, it might buy a “handyman’s special” in the back of beyond.

I have only read the first few posts, but trying to be helpful I'd suggest a simple trust that pays out minor sums at 18, enough for a car and a holiday perhaps, and the rest invested until 25 with a recommend that he buy a property, protected by a pre-nuptial agreement in case he marries and divorces young. Obviously, I'd make provision for university or training costs to be met from the fund. Essentially, my objective with £150,000 would be to come out of education debt-free and with a decent deposit on a first property.

@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

I think this is a great idea

In England & Wales children under 18 can't inherit. Monies have to be placed in Trust for them. The Will will usually specify who the Trustees are and under what terms the child can access monies before 18 ( or whatever age is specified) eg for subsistence / education etc.
Sometime the Trustees are also the Executors of the Will.

The Trustees are obligated to invest the monies for the beneficiaries.

There will be nothing you can do to stop your son having the money at 18 if that is what the Will and Trust specify. You should have been told who the Tustees are and what the terms of the Trust are.

You have no legal rights to control the money, but plenty of moral suasion. If possible, restrict money and hand it out at 18, 21, and 25. If he wants money, ask him for a sensible plan on how it will be spent. Don’t buy a house unless an experienced landlord with DIY skills. Letting is difficult, and the law is usually on the tenant’s side

I'd be inclined to tell him sooner rather than later, might stop the "wahey I'm loaded, let's hit the pub!" feeling at 18... or maybe not!

It's hard to know really, only you know your child and how they will deal with it.

Not to that scale but my son's have/will receive a nice sum when 18 which my parents have been saving..

DS1, 18 a couple of months ago, huge saver, was never a concern over him blowing it, which is exactly what he hasn't done. His plan is to keep it for a house deposit.

DS2, currently 13, is currently a different kettle of fish and we will probably have to hope that he doesn't blow it in one weekend . We're kind of hoping that he will have just seen his older brother benefitting from starting on the house ladder and will follow his lead..

My kids have each inherited this. The eldest is over 18 and he knows about it. I’ve also told him it’s only for a home or for masters / law school or similar. Whilst he has asked for a bit to buy a new MacBook I’ve simply said to him it’s not there for spending. It’s invested via our financial advisor and he won’t let him have it randomly either

The other 2 who are younger know they have some money for a house deposit but not a clue how much. Again, although they would theoretically be able to touch it at 18 in reality as it’s invested and they would need to go through our investment manager they would be hard pushed to get their hands on it easily.

@Oneforthemoneytwo

My kids have each inherited this. The eldest is over 18 and he knows about it. I’ve also told him it’s only for a home or for masters / law school or similar. Whilst he has asked for a bit to buy a new MacBook I’ve simply said to him it’s not there for spending. It’s invested via our financial advisor and he won’t let him have it randomly either

The other 2 who are younger know they have some money for a house deposit but not a clue how much. Again, although they would theoretically be able to touch it at 18 in reality as it’s invested and they would need to go through our investment manager they would be hard pushed to get their hands on it easily.

Is that legal? A financial advisor being allowed to stop an adult from taking out their own money?

Wouldn't it be used for his education?

It’s invested via our financial advisor and he won’t let him have it randomly either

If it is his then what on what basis is the financial advisor withholding it? If your son wants the lot to throw a huge party then the financial advisor must hand it over.

At this age he will listen to your decision whereas at 14 or 16 he might automatically not.
So maybe making a suggestion of what to do with it now (which isn't easily liquidated) would be the best thing e.g. We can buy a house now and rent it out and the rent will be for your driving lessons and university, and when you leave uni you can sell it and buy your own house.

I had a friend who inherited 50k at 18 - she knew it was coming, always had. Therefore she never saved a penny in her teens, and the money came in at 18 and it was gone in months - honestly, months. She bought TWO brand new cars, enough new clothes to dress an army and would regularly just go out for dinner/drinks etc and pay for her boyfriend of the week to go on holidays etc.

Her parents were sensible, open people - but her knowing it was coming to her was an absolute undoing.

So I'd not say anything - let him get into the habit of saving, learning and understanding money, and educate him on the importance of pensions/mortgages/obtaining and appropriate use of credit (which is important in terms of getting a mortgage etc) and how much a house/education costs post-18....... I think you have to let it unfold naturally in a way. A time will come when it feels 'right' to say it. But don't do it now. To an 11-year old £150k sounds like a golden ticket, even to the most sensible of children :)

Good luck, and congratulations - it's a wonderful position to be in to know your child is (potentially!) going to be financially okay in adulthood xxxxxx