Loan From Your Kids?

sp1987

The very accurate phrase is never, ever be a trustee due to the onerous legal obligations that one needs to adhere to.

There is a hell of a lot of case law dating back hundreds of years (Keech v Sandford on leases sticking in my mind) regarding how deep in the brown stuff those who benefit from trusts have become.

Acting to the benefit of the child (ie giving some money as interest) would not even seemingly be enough to prevent ones liabilities existing as liability exists where duty and interest conflict, with no distinction made between an honest and a dishonest trustee (Boardman v Phipps).

I almost think the OP must be a troll as the simplicity of the facts make it near impossible that a beneficiary would not win on the facts. Using the beneficiaries money to pay for the mortgage, lending money to the trustees where the trust may profit from an outside loan to a third party which is an avenue not investigated? I cannot fathom better facts to start a case for breach of trustees duties than those outlined above. Charging a 6 year old child for rent and expenses when ones parents receive monetary contribution from the state (even at the smallest child benefit level) for such expenses? A judges dream, surely! That could be a very, very expensive mistake at 8% statutory interest until the child gets it to court in a few years.

I for one am so fortunate to have parents I did not have to wait patiently until my 18th birthday to sue, it would seem.

sulkisu

I also hope to goodness this is a troll. But if it isn't (heaven help us), the legal position is that you cannot touch this money unless it is for the express benefit of the child. This does not mean that you can use it for her everyday expenses, e.g. food, clothes etc. You can't use it to buy a bigger car, or pay your mortgage, even though she will naturally benefit from it. As her parents you would have to provide those things anyway, so if that it what you have been doing - you need to put it back. A friend of mine had a similar trust (but for 60k) held by unrelated trustees. Whenever her mum wanted to use money from the trust, she had to apply for it and it was only allowed in certain circumstances. I know that it was used to pay for a couple of expensive overseas school trips - which she wouldn't have been able to go on otherwise (they were a low income family). Some of it was also used to to help pay her stage school fees. It might help you out to spend her money, but it isn't yours to spend.

Credit_Girl

This is a twisted situation and I'm sad that you are in such a desperate state that you have considered taking or "borrowing" your daughter's money while she probably has no clue. To be on the safe side, I'd recommend what the others said as well-don't touch it.

steadynerve

Thanks again for all the messages. If someone expalins to me what a troll is i will tell you if i am one! the reason for the gaps in posts is i don't log on very often but as the issue still remains i'm keen to read the answers.
I noted some people picked up on the fact that the money can be used for the express benefit of the child. But I was interested to see that person went onto to say they could not be used for clothes food for the child. I would have though that would have counted.
To rephrase the query again i suppose one is sayig currently there are four parties invloved parents, daughter, mortgage provider and savings provider. The question is really can daugher adnd parents do somethig legally togethr to cut out the mortgage providers cut. T0 get to a position were the family overall is better off.
I realise people are thinking we are cutting our daughter out but it isn't that as we can easily down size the house when the daughter leaves home and this will almost certainly generate more than sufficent funds to pay the daughter what is owed. So its not a question of we are stealing the daughters inherentence to pay for her food. But more a question of can we legally clain her food as expenses use this to pay off the mortgaage and still we will pay her back in full later. i'm assuming the daughter coudlnlt give us legal consent to take the money until she is 18 so its a cae of whtare the ohter legal ways to acquire it. Its suppposed to be a genuine money saving issue not a child inheritance robbing exercise!!

sunshinetours

steadynerve wrote: »

Thanks again for all the messages. If someone expalins to me what a troll is i will tell you if i am one! the reason for the gaps in posts is i don't log on very often but as the issue still remains i'm keen to read the answers.
I noted some people picked up on the fact that the money can be used for the express benefit of the child. But I was interested to see that person went onto to say they could not be used for clothes food for the child. I would have though that would have counted.
To rephrase the query again i suppose one is sayig currently there are four parties invloved parents, daughter, mortgage provider and savings provider. The question is really can daugher adnd parents do somethig legally togethr to cut out the mortgage providers cut. T0 get to a position were the family overall is better off.
I realise people are thinking we are cutting our daughter out but it isn't that as we can easily down size the house when the daughter leaves home and this will almost certainly generate more than sufficent funds to pay the daughter what is owed. So its not a question of we are stealing the daughters inherentence to pay for her food. But more a question of can we legally clain her food as expenses use this to pay off the mortgaage and still we will pay her back in full later. i'm assuming the daughter coudlnlt give us legal consent to take the money until she is 18 so its a cae of whtare the ohter legal ways to acquire it. Its suppposed to be a genuine money saving issue not a child inheritance robbing exercise!!

"The" daughter or "your" daughter ??? - sorry this whole post stinks of either a troll or someone who really shouldn't be in charge of kids.

You haven't addressed any of the issues raised such as what if you cannot repay etc so in simple terms that you can understand - NO you should not touch it for any expenses or anything. It was not left to you from what you have posted

CAPMguy

man your child would hate you forever hahaha i mean really!

SailorSam

After my mum died the inheritance that went to my two little nieces was put safely away from where my sister could borrow from it, it's all to easy to forget to repay it.
Using the money to perhaps buy a new Tv because it's for the kids to watch, just doesn't hold water. What would come next, we'll buy a car so we can take the kids out.

Edinburghlass_2

steadynerve wrote: »

I noted some people picked up on the fact that the money can be used for the express benefit of the child. But I was interested to see that person went onto to say they could not be used for clothes food for the child. I would have though that would have counted.
To rephrase the query again i suppose one is sayig currently there are four parties invloved parents, daughter, mortgage provider and savings provider. The question is really can daugher adnd parents do somethig legally togethr to cut out the mortgage providers cut. T0 get to a position were the family overall is better off.

Your daughter is 6 years old, how are you going to do "something legally together" are you going to give her a bill at the end of each week and explain you are taking the money from her inheritance for her food and rent?

I realise people are thinking we are cutting our daughter out but it isn't that as we can easily down size the house when the daughter leaves home and this will almost certainly generate more than sufficent funds to pay the daughter what is owed.

And if it doesn't generate enough funds does this mean "your" house now becomes your daughter's house?

So its not a question of we are stealing the daughters inherentence to pay for her food. But more a question of can we legally clain her food as expenses use this to pay off the mortgaage and still we will pay her back in full later. i'm assuming the daughter coudlnlt give us legal consent to take the money until she is 18 so its a cae of whtare the ohter legal ways to acquire it. Its suppposed to be a genuine money saving issue not a child inheritance robbing exercise!!

You say on the one hand you want to legally acquire the money and on the other hand that you aren't robbing her inheritance?

RobertoMoir

steadynerve wrote: »

Thanks again for all the messages. If someone expalins to me what a troll is i will tell you if i am one! the reason for the gaps in posts is i don't log on very often but as the issue still remains i'm keen to read the answers.
I noted some people picked up on the fact that the money can be used for the express benefit of the child. But I was interested to see that person went onto to say they could not be used for clothes food for the child. I would have though that would have counted.
To rephrase the query again i suppose one is sayig currently there are four parties invloved parents, daughter, mortgage provider and savings provider. The question is really can daugher adnd parents do somethig legally togethr to cut out the mortgage providers cut. T0 get to a position were the family overall is better off.
I realise people are thinking we are cutting our daughter out but it isn't that as we can easily down size the house when the daughter leaves home and this will almost certainly generate more than sufficent funds to pay the daughter what is owed. So its not a question of we are stealing the daughters inherentence to pay for her food. But more a question of can we legally clain her food as expenses use this to pay off the mortgaage and still we will pay her back in full later. i'm assuming the daughter coudlnlt give us legal consent to take the money until she is 18 so its a cae of whtare the ohter legal ways to acquire it. Its suppposed to be a genuine money saving issue not a child inheritance robbing exercise!!

The simple answer is that if the money is in trust, it can't be touched for the purposes of solving your problems with your mortgage. You might claim it has a knock on benefit for the girl and you may be right, you might claim that you'll repay it and I'm sure you intend to (though what will you do if things go pear shaped?) but really... you can't touch it for those purposes and it would be best to forget about it.

With the greatest of respect, your questions suggest you are not ideal trustees.

Snakeeyes21

RobertoMoir wrote: »

The simple answer is that if the money is in trust, it can't be touched for the purposes of solving your problems with your mortgage. You might claim it has a knock on benefit for the girl and you may be right, you might claim that you'll repay it and I'm sure you intend to (though what will you do if things go pear shaped?) but really... you can't touch it for those purposes and it would be best to forget about it.

With the greatest of respect, your questions suggest you are not ideal trustees, or parents

There you go, I fixed it for you, Im sure you didnt mean to miss that bit off the end