Money Moral Dilemma: Is it OK to pay off our mortgage with our son's winnings?

Pollycat

Livy wrote: »

Everyone there referring to it as stealing.
Don't agree, if this did happen, and were able to pay off the mortgage,
Surely the child may have a higher quality of living,
Eg more holidays etc and the parents wouldn't have to be paying a mortgage,
I'm not saying the child shouldn't get any money
However it would be wise to offset the mortgage to begin with

I agree with marliepanda.
There is no guarantee that the child may have a higher quality of living, no guarantee that the parents would spend the money on their child.
In fact, if they are as grasping as they appear by considering using this gift from the child's grandparents, I think it highly unlikely that they'd spend any additional money on their child.

It would be wise to do nothing and wait until/if these premium bonds actually win any money.
'counting chickens...'
'cart before the horse...'

AylesburyDuck

gunsandbanjos wrote: »

I’d say yes on one condition.

You need to repay the money to him. Not in the form of the house to inherit as he would likely get that anyway.

If he won £50k then you need to repay £50k by the time he is 16.

If you don’t then you are stealing from your own child- that money would give him an amazing start when he grows up.

Plus the interest it could have gained while sat in a savings account/invested ect.
But really not even then in my book, not their money and frankly any set of circumstances could happen and then they are not be able to pay it back.
It might sound like a good idea but its morally wrong in my book.

Pollycat

One wonders what next that these new parents will want to appropriate that belongs to their child.
Birthday money?
Sell the child's Christmas gifts on ebay?
Steal the money left by the tooth fairy? :whistle:

peachyprice

Any winnings held in an account for the child = guaranteed windfall for child

Any winnings 'invested' in the parents property at risk of being lost through:
Ill health
Divorce
Bankruptcy
Care home fees
Already apparent f eckless parenting
Natural disaster
= No guaranteed windfall for child

It's not difficult to work out .

LesD

Anyone else think ML is already drafting a book on the psychology of financial management and using mythical so-called dilemmas to see how we (the unwashed masses of MSE) react?

crmism

As your son is a minor, trustees such as you and your spouse would need to be appointed to deal with prize money, but you cannot deal with it as you please as it belongs to your son, not you. There are statutory powers in place to restrict trustees in their choice of investment, and using some of the money to clear your mortgage would, I think, infringe those powers as it would be you who benefits, not your son.

Trustees may lend on mortgage, but the interest rate has to be commercial, so as I see it there is no sense switching from your present lender. I take your point that your son would eventually benefit, but he might want all of his prize money the moment he reaches 18 years of age and, with property prices continually rising, it would mean that a sizeable chunk of your home would be due to him. That might necessitate sale, or an even bigger mortgage than you have now.

It would be wise to consult a solicitor who specializes in trustee law so that, if and when the time comes, you know what steps to take.

clairec79

No of course it's not right

However if you do, it's not YOUR house any longer it would be HIS (or at least proportionally) and when he becomes an adult would be morally entitled to claim HIS money back then, and insist you sell

Hol55

The fact that you are his parents doesn't legally entitle you to do whatever you wish with a premium bond in his name - and particularly not to use any winnings due to him on a financial arrangement for which you not he would be the beneficiary, as with paying off a mortgage on a property that belongs to you not him.

That and as people have rightly pointed out, anything could happen with the house in the meantime to ensure that he didn't even get that money back via inheriting the property.

If he wins anything (unlikely), save or invest it somewhere for him where it'll hopefully grow. Not in your property.

ninkynog

you should do what you think would be best for your son. If that means paying off the mortgage and saving the family money, then why not. Everyone's a winner (except the lender who no longer gets the interest) You could take out a will at the same time leaving your estate to your son and when you've paid off the mortgage put it in trust for him.

Pollycat

ninkynog wrote: »

you should do what you think would be best for your son. If that means paying off the mortgage and saving the family money, then why not. Everyone's a winner (except the lender who no longer gets the interest) You could take out a will at the same time leaving your estate to your son and when you've paid off the mortgage put it in trust for him.

Of course, this is all assuming that the premium bonds do actually win a considerable amount of money.
Which of course is nowhere near likely.