Loan From Your Kids?

steadynerve

Hi

I know its usually trhe other way round but

Our 6 year old girl has acquired £10,000 from a relative and it is in a childrens saving account with us as trustees.

She is 6 and is richer than us!!

I know we can take out the money and spend it for the benefit of the child.At the monent we use it for her expenses.

Can anyone advise on what we can an cannot do legally with this money?

For example could we take a loan from our daughter and pay it back at a commercial but reasonable interest rate?

Could we charge her a rent? I know this sounds terrible but it would help us out a lot and we could try and make up for her later.

Any advice appreciated.

Credit-Crunched

steadynerve wrote: »

Hi

I know its usually trhe other way round but

Our 6 year old girl has acquired £10,000 from a relative and it is in a childrens saving account with us as trustees.

She is 6 and is richer than us!!

I know we can take out the money and spend it for the benefit of the child.At the monent we use it for her expenses.

Can anyone advise on what we can an cannot do legally with this money?

For example could we take a loan from our daughter and pay it back at a commercial but reasonable interest rate?

Could we charge her a rent? I know this sounds terrible but it would help us out a lot and we could try and make up for her later.

Any advice appreciated.

I hope this is a joke if not then whhoaaaaaaaaaaaaa mama you is baaddd.

In short the answer is no, you are the trustees correct? I am sure the settlor chose you as you would always have your childs interest at heart?

Your child is whats called the beneficiary, i.e its for here benefit, you may be the legal owners of the trust, but it is in essence your daughters money.

The trustee Act 2000 dictates that you can only act in the interest of the beneficiary and care a nd dillagence must be taken whilst overseeing the trust.

Taking money for your own gains is not.

Hope this helps (not as much as i hope this is a wind up thread!!)

hallnaomiuk

Dont touch it, its not yours!
Keep it safe and in savings until she is old enough to have it - 18+

If the person who gave it to her, wanted you to have it to help keep her (living costs etc) - they would of given you seperate money to do so.

hallnaomiuk

If in doubt get legal advice!

Generali

I know nothing about your circumstances but unless you're genuinely in the brown stuff (eg homeless, needing medical treatment, unable to feed the family) then you should leave the money alone on a moral basis.

When you have kids you have a commitment to them - they weren't asked to be brought into the world, you did it. As a result, you have to feed/house/clothe them until they are of an age to be able to do it for themselves.

Your kid has come into a little cash that could help ease her way through the start of her adulthood. It's hers not yours and you should leave well alone!

steadynerve

Thanks for your replies. I suppose it was the legally position i was after which can often be different to what is morally right.

I was thinking can we use this money to pay off the mortgage on the house. It does seem strange to be paying loan interest on one hand and recieving less on savings in the other. And our daughter obviously lives in the hose.

The was the reason for adking is it legall to borrow the money from our daughter to pay off the mortgage. it would make financial sense it wanlt a joke.

Alternarivel if loans were not legal could we charge the daughter rent to allow us to acquire the monety this way to pay off the mortgage.

I would still want to do the right thing morally so would be happy for us and the daughter to discuss the issue when she is old enogh and make sure all sides are happy with the arragement and if not put it back to how it would have been.

RobertoMoir

steadynerve wrote: »

Alternarivel if loans were not legal could we charge the daughter rent to allow us to acquire the monety this way to pay off the mortgage.

I would still want to do the right thing morally so would be happy for us and the daughter to discuss the issue when she is old enogh and make sure all sides are happy with the arragement and if not put it back to how it would have been.

I appreciate that times are hard but I don't see how you can reconcile those two statements. There's no moral dimension where this is correct imho.

elfen

Riiiiight. And by charging your TEN year old rent so you pay off your mortgage is morally right is it? Also, how do you propse to pay it back? Will full interest at your mortgage rate?

Kavanne

elfen wrote: »

Riiiiight. And by charging your TEN year old rent so you pay off your mortgage is morally right is it? Also, how do you propse to pay it back? Will full interest at your mortgage rate?

She's SIX!! That's WORSE, she probably doesn't even understand what she has and her parents are planning to steal it

What if you fall on harder times and can't pay it back? How will you explain that to her?

Just put it in a fixed rate account and forget about it.

lilmiss1982

"At the monent we use it for her expenses" What expenses are these? how was she paying for these before she got her £10.000?

Please try to forget this money and don't touch it until you daughter is 18 when she can decide what to with it, like fund uni,or deposite for a house.

My 3 year old has more money saved than me, he been given it from family and friends but I wouldn't dream of touching it as it not my money but his.

Kavanne

I agree with lil miss. Don't use it for her 'expenses'. you're her parents and you should be supporting her!!