Buying Property for Children???

TJ27

My kids have got a fair bit of money stashed away in savings accounts. My wife and I have given it to them bit by bit and it's mounted up!

It concerns me slightly that when they turn 18 they will be able to get their hands on it and potentially could snort it up their noses, drink it, or otherwise squander it. It's a long way off, because they are only 4 and 6, and I would hope that I bring them up not to be alcolohic drug addicts, but nevertheless I do worry.

I have this notion that if their asset was slightly less liquid, then they might be less able to squander it. So I would like to buy something like land or property, which would be for them and bought with their own money. They don't really have enough for property yet but a good parcel of land is an option.

I don't think that minors are able to hold titles to property so it may not be possible. But then minors often inherit property, so there might be some way of doing it. Trust or something??

Anybody know how it might be done? Is it easy?

clutton_2

i really think you need to talk to a solicitor on this one - many companies offer a free "half hour surgery" for you to go and have a free informal chat first.

RHemmings

TJ27 wrote:

My kids have got a fair bit of money stashed away in savings accounts. My wife and I have given it to them bit by bit and it's mounted up!

It concerns me slightly that when they turn 18 they will be able to get their hands on it and potentially could snort it up their noses, drink it, or otherwise squander it. It's a long way off, because they are only 4 and 6, and I would hope that I bring them up not to be alcolohic drug addicts, but nevertheless I do worry.

I have this notion that if their asset was slightly less liquid, then they might be less able to squander it. So I would like to buy something like land or property, which would be for them and bought with their own money. They don't really have enough for property yet but a good parcel of land is an option.

I don't think that minors are able to hold titles to property so it may not be possible. But then minors often inherit property, so there might be some way of doing it. Trust or something??

Anybody know how it might be done? Is it easy?

Pardon me for being a busybody, but if I were you I'd be more concerned about raising your children to have morals and life skills than about hiding the money from them.

wymondham

RHemmings wrote:

Pardon me for being a busybody, but if I were you I'd be more concerned about raising your children to have morals and life skills than about hiding the money from them.

I don't think this is a constructive comment, it's a money forum rather than morals forum...

Bossyboots

TJ27, you also missed out protecting the money from gold digging girl/boy friends.

I think you definitely need some proper legal or financial advice on this one. If you buy in your name, then you have capital gains tax issues so you need to do this properly.

TJ27

Well I did wonder if I was being a bit over cautious/protective/something else.

I'm not trying to hide it from them and I agree about the morals and life skills points and stuff. If we didn't want them to have it we wouldn't have given it to them in the first place. It's just that I've seen several teenagers who are great, well balanced young adults. Then as soon as they get their hands on a pot of cash they go bananas and don't really know what to do with it.

A friend of mine in school got a large sum of cash from his father, who died in a construction accident. Because he had loads of cash and no restrictions, he is now dead too.

I live almost opposite a high school. It amazes me when I see 17 and 18 year olds coming to school and parking their brand new Mercedes outside my house, with personal numberplates. Then a month later they've crashed it. On the one hand it's up to them what they do but on the other that's a bit daft isn't it? I dunno.

It's just that this is money which my wife and I have given them (for a lot of reasons) and could ultimately ruin them. So I suppose you could argue that we were wrong to give it to them in the first place.

Anyway, I think you guys are right. Solicitor is probably the solution. Ta.

RHemmings

wymondham wrote:

I don't think this is a constructive comment, it's a money forum rather than morals forum...

This is not just about morals, it's about teaching children to be sensible with money. I can't see how that is irrelevant on a money saving forum.

Generali

To get back to the point, my belief is that if you put the money in trust for them then you can dictate when they get it, depending on how the trust is set up. A solicitor should be able to help set one up for you.

TJ27

RHemmings wrote:

Pardon me for being a busybody, but if I were you I'd be more concerned about raising your children to have morals and life skills than about hiding the money from them.

Oh, I am. I'm concerned about a heap of things regarding the future of my children, although "hiding" their asset isn't actually one of them. This thread is just a very small part of trying to ensure I do the right thing.

The fact is that there is a high possibility that their mother won't be around before too long because she is terminally ill and is at the last chance saloon as far as treatment goes. So for sure I'm concerned about all aspects of raising them single handedly.

I just thought that this might be one way of reducing the likelihood of them going off the rails when they are older? Perhaps I'm mistaken. I don't really know. What would you do? Should they get a big pot of cash or perhaps a house when they are older? Or something else maybe? Or should I just stop giving them money because it will ruin them?

TJ27

RHemmings wrote:

it's about teaching children to be sensible with money.

Quite right. I really hope that I am able to teach them how to be sensible with money. But this is more to do with whether they have it or not.

Is it better to just give it to them and hope they are sensible, or give it to them in a form which gives them less scope to squander it?

Personally I favour the latter option but I'm open to suggestions.

mrsS_2

I would suggest going to see a good financial advisor- you can squirrel money away into investment products for children by way of a trust - a solicitor could do the trust part but is not normally allowed to make investment recommendations.

Also if interest on cash in their name exceeds £100 you have to declare it on your own tax return. If your children have large sums in the bank this could mean you end up paying higher rate tax on the income for no real reason.

property can be held by minors (my financial advisor has mentiond it)-but it may be more complicated.

In the meantime, get them used to having pocket money and buying the things they want out of this-amazing how having to buy his own warhammer models to paint has changed the way my 7 year old treats his toys!