A Strange Situation

DanoG

Hi All,

I'm coming here to find an answer for my mum as I can't find the answer for her. She has recently been diagnosed with a terminal brain tumor and has cashed in her life insurance. She also owns 50% of a property worth approx 120k.

The problem is she has a son of twelve and her marriage was in tatters before this diagnosis happened. Her husband (not my dad/it's complicated) isn't exactly trustworthy when it comes to money and she fears leaving any amounts of money in his hands for his own son is a bad idea.

She has 10k that she needs to do something with now and her half of the property will be shared between two children. One is an adult but the other as I said is twelve. It is likely that the property will be sold so there will be approx 30k that needs to be added to the 10k in the coming years. She wants me to take care of this 30k and make sure it gets added to the 10k.

Now, I'm OK with managing my own money but I have absolutely no idea what I'm doing with this situation. I have got as far as dismissing ISA's as you can only put just under 6k in them per year, I don't like the idea of the stocks and shares savings as I don't want to risk this money in any way shape or form and my mum isn't a fan of premium bonds. She also wants it to be locked up until he is 18 or 21. I basically need somewhere to put 10k now and add 30k in 1-5 years which at the same time can't be touched for six years.

I'm out of ideas, any help would be much appreciated.

Thanks

xylophone

Your mother should see a solicitor and arrange for a trust to be set up for her son?

http://www.hmrc.gov.uk/trusts/types/vulnerable.htm see vulnerable beneficiary - you could be a trustee- be sure that you understand tax treatment.

Vortigern

What an awful situation to be in.

Has your mum made a will? With the complications of a errant 2nd husband and a young child she would probably be better off going to a proper solicitor, rather than a will writer.

There is a board here which deals with such things.

http://forums.moneysavingexpert.com/forumdisplay.php?f=217

Apologies in advance for its rather blunt, possibly distressing title.

alanq

DanoG wrote: »

I have got as far as dismissing ISA's as you can only put just under 6k in them per year, ...

£15,000 from July which may or may not help given the current situation.

Archi_Bald

alanq wrote: »

£15,000 from July which may or may not help given the current situation.

£15K isn't for a 12 year old - under 16s limit is £4K p.a. if I remember correctly. A sibling has no right to administer an ISA for a child - only a parent / legal guardian has.

The mother could have a £15K ISA from July but this would become part of her estate and probably automatically go to her husband if she has not lodged a legally valid will with a solicitor.

A will won't solve the guardianship for the 12 year old, either.

The whole matter is way to complex for some internet opinions - OP, your mum must go to a solicitor. May be start at the CAB, they might give free legal advice and/or can refer to suitable professionals.

atush

Your mum needs a will, and to make you the executor, and for you to be joint guardian or if not possible to be legal guardian/trustee for the child.

If it is possible to decide legal guardianship while she is still alive to someone other than the child's father (be it you or someone else) then that could help

DanoG

Thanks for all your advice