Loan From Your Kids?

ManicMum

I can only speak from experience. When i was a teenager, my Dad asked me how much I had in my account. It was about £500. He said he may have to use it to pay the mortgage. This was the late 80s/early 90s when interest rates doubled. At no point did I feel i would be having this money stolen from me. I would have given it to my Dad, no problem. In the event, he didn't ask for it. There was also a time when i was younger and my Mum 'borrowed' my £10 birthday money as they were so skint. I got it back eventually but it was a long time coming as they were really hard up.

I'm not agreeing with OP unless he is totally up to his neck in it. I'm just saying there are some situations where raiding your kids piggy banks is in the interest of all.

As regards 'expenses', my aunt sends my children £50 for birthday and Christmas but we use the money towards shoes and clothes, as they really don't need £300 worth of extra toys each year. Am I an evil Mother? Gosh, hope not!

Aless

OP the error in your reasoning is looking at the "benefit of the family unit". The only thing you are allowed to act in is the best interests of your child.

You are not allowed to pay expenses, pay part of a family holiday, pay the mortgage off. How could this possible be in the child's interest.

If you have been taking money out for any sort of expenses for your child you will be in breach of the law. You can't loan it to yourselves as that is a conflict of your interest and hers. The sort of things that you could spend it on for her are things such as a life saving operation, I am struggling to think of anything else to be honest.

As many others have said, leave it in the account until your child is 18 and only remember to check that it has a good rate of interest.

ManicMum - the difference in your situation is that your account was not a trust of which you were the beneficiary and your dad was the trustee. There is a whole area of law, called equity, which deals with the OP's situation and that is irrelevant to yours. OP it is called equity as the parties have to act equitably and nothing you have suggested equates with acting equitably.

To be fair I think that the replies so far have been pretty clear as to what you can't do. You are not going to get an answer you prefer that is correct. So just leave that money alone, it does not belong to you.

CHR15

clb776 wrote: »

Also, what is a troll please? I see this alot on mse, and I don't understand what is meant by it?

minidannii

people might go against me, but am 21. My parents won't take rent money of me. They said they want us to afford a car, and save than taking out loans.

I do plan to move out, but i would like to meet someone than living alone, i would like to move out by 23 just need to find a sugar daddy :rotfl:

heating-eng

Kavanne wrote: »

do not steal her money, that is illegal. just because you think you'll pay it back, doesn't make it ok

here here .....keep your thiefing hands off

BitterAndTwisted

There is a thread going on in the House-buying and Selling forum about how to screw money out your own mother's property. When she has dementia through Power of Attorney


http://forums.moneysavingexpert.com/forumdisplay.html?s=&daysprune=&f=16

ManicMum

right everyone. Jump over to that one!

heating-eng

ManicMum wrote: »

right everyone. Jump over to that one!

:rotfl::rotfl::rotfl:

MrsBartolozzi

steadynerve wrote: »

Ok - I get it I think people are winding me up!! I'll try to expalin myself one more time with example figures to illustrate point and make maths easy (please note NOOOOOOT real ones!).

Daughter has in trust say 50K
Best savings account rate 2%
Amount owed on parents mortgage 100k
parents morgage rate 5%
value of house 300K
*********
scenario 1
leave money in trust
daughter get £100 interest a year
parent pay £500 interest a year
each year family unit down £400 in interest
at 18 daughter get inheritance 10K plus interest

scenario 2
********
parents legally tale £1000 in expenses( for food, clothing rent orr whatever (whatever is legally allowed to do this is the query!!!!)
money used to reduce morgage so mortgage any interest reduce over the years
at 18 money trust down to zero parents have legally taken expenses from trust and used to pay off mortgage.
parents then downsize house releasing 50k for child and interest added on top to ensure benfactors wishes met and daughter gets inheritance
parents can also add extra to childs inheritance diue to the money they have saved.

As there was no risk of child losing inheritance, the expenses taken were done legally( if this possible this is the query0 as money spent on child and everyone including child benefits from scenario 2.

- alternatively can the parents justsay for example its in the best interest of the child for the 50k to be loaned to the parents at a rate of 3%. Similar outcome everyone benefits except the mortgage company. daughter earns extra 1% interest.

hope that expalins where this is coming from - its just monetsaving advice i'm after - and am no monster!!

Can I just ask how much interest you were planning to "add on" to the borrowed amount? 2% of £50k is NOT £100, but £1000. So The child would have an extra £12k (actually more allowing for compound interest, but I can't be @rsed working that out ) in their bank account that you would have to at least match, plus whatever amount you'd give your child anyway.
And what if the interest rates rise to those of the 80's - 10% for instance would you be [STRIKE]happy[/STRIKE] in a position to lay aside £5k a year for paying back?

Both my brother and I had bank accounts held "in trust" for us by our parents. I don't know what was in my brother's when he got his, but mine had only £750ish in it when I turned 18. I was well aware of several inheritances of a couple of £2-3 thousands which went in there as well as excess birthday/Christmas money which was spirited away into "the bank account" for safety.
It still makes me feel uneasy and cheated when I think about it now, 20 years later. I now have 2 boys and they have their own bank accounts and any Birthday money etc goes in and they have access to it. They also have a savings account which they can access, but it is for proper savings rather than spending IYKWIM, so the books are kept out of reach.

While I can see where you are coming from OP, you only want to save money, which you can later on give back to your daughter in the mean time leaving more money for you to spend on the family, and perhaps my parents intended paying back too. But they didn't, and who knows you might not be in a position to either.

Don't do it, your daughter will thank you for it.

ViolaLass

ManicMum wrote: »

As regards 'expenses', my aunt sends my children £50 for birthday and Christmas but we use the money towards shoes and clothes, as they really don't need £300 worth of extra toys each year. Am I an evil Mother? Gosh, hope not!

Why not put the money in savings for them? Who says you /have/ to spend it?