Loan From Your Kids?

StrawberryYogurt

I cant believe I have missed an opportunity for extra income!! All these years...my kids have just been well...kids! But I could of been claiming expenses of them?!! LBM!!!!

This is just SO wrong!!

AnxiousMum

Funnily, the word 'trustee' contains the word 'trust'......presumably because the person who is 'trustee' for the minor was assumably a trustworthy person to ensure that the funds were used correctly, invested in a proper manner, so that when the daughter reaches a certain age, she would have a lovely nestegg.

I too believe that in the conflict of interest situation the trustee should resign and another trustee appointed.

Does the daughter know of the trust account? I'll bet she doesn't......

StrawberryYogurt

I wonder how much interest she will lose to with the "trusted" mum and dad helping themselves! I hate to nitpick, but this is wrong

Ritchie74

Ooh interesting thread. I have 2 step-children so can I charge them even more for rent? I only signed up for the missus and these just came along with her 8 years ago. Can I back-charge? What's the premium for being non-blood?

On second thoughts I love my kids (and I do class them as mine) and would rather lick shoes clean before charging them rent. Jeez kids are innocent and never asked to be born, how can you charge them to eat/be warm/be clothed? Clearly the person who left this child £10k wanted her to have it and bypassed her mother for good reason. If the op cares one jot about that child they should appoint a new trustee who really cares about the best interests of this child.

theoretica

I am assuming that this is a bequest? Unless it specifically said in the will that this money was for the child's maintenance and included that word (or you apply to the courts, which will cost you) there is very little indeed you may do with the money. I do appreciate that the banks seem to benefit from this, but that is the case. You need to stop thinking of this as part of the family finances- it is completely separate.

steadynerve wrote: »

But can you comment on whether food and clothing expenses would be ok as best interest deductions?
No. As a parent you have a duty to provide these. This money may not be spent on anything essential, or anything it would be child abuse not to provide.

Agin i stress this is about arragning the family finances in the best way as a whole
Sorry, NO. As I quoted before YOU MUST NOT BENEFIT. Not even if your daughter does too. You would not be wishing to do this if it were not to your benefit - so you can't.

Wahat in question is how th monies put to use prior to this point legally,
See below. Only any INTEREST earned on the investment may be used. You may not touch the capital.

http://www.wisewills.co.uk/Infants%20Children%20and%20guardianship.htm
The Trustees also have power to use the interest earned on any investments for the child's benefit maintenance or education.

steadynerve

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!!

asharon

your daughter was left the money not you. Even using it for her expenses is wrong.

She'll need the money to pay for the therapy of her childhood.

as long as you give it back with interest why not. Just dont forget

theoretica

steadynerve wrote: »

everyone including child benefits from scenario 2.

I, and probably others, do understand the maths and where you are coming from. However as the 'everyone' who benefits includes you, the trustee, you may not do it. Sorry.

You might want to seek legal advice from a family trust lawyer if you won't believe us.

steadynerve

O I should have added - in the real scenario - the money is not actually an inheritance. Its jsut money that has been gifted by friends of the family. it resides in a childs bank account with one of us as parents as the adult (presumably trustee) of the account. i believe the bank lets us take money out of the account when we want until the child is 18. The child can take money out after about 8 or so i think. but we wot be telling the child about the account until they are 18 as we don't want the child spending it until at least then.

the advice sort was really what sort of things can we legally take the money out of the account for. So for example if we were going to pay £1000 on a child skiing holiday. could we legally use this money and then pay the £1k we were going to spend on the trip ourselves into the mortgage. similarly could we legally do a the same thing with other expenses such as food,clothing rent etc. The query is what sort of deductions are ok legally and what are not. And what are the rules. i've only come acroos in the best interest of the child so far. so does food or clothing or holidays or what exactly cover this condition or not. does it matter if we would have spent this money anyway regardless of whether trhe daughter had the money to pay for it herself.

Slightly of topic but my dad left schhol at 14 and his first earnings at 14 went nearly all to his mum to cover his household expenses. I think this was common practise in the 1940s 1950s.

xmaslolly76

Steadynerve I think you should give up you are not going to get any justification from anybody on here for using your daughters money even if you have every intention of paying it back. As others have said it is NOT your money forget it is there and dont touch it!