Money left to my children

stephenadarglas

As a lasting memory to their grandfather then I suggest Premium Bonds as, with all due respect, the amounts are not life changing as they are. At a time that suits you in the future you can then tell them about the legacy left by their grandad and, if they are lucky, a bit more added on top.

Gary1984

What if someone wins a big prize though? Unlikely perhapss but it would be awkward to explain why child a is getting so much more than child b just a few years apart?

bowlhead99

stephenadarglas wrote: »

As a lasting memory to their grandfather then I suggest Premium Bonds as, with all due respect, the amounts are not life changing as they are. At a time that suits you in the future you can then tell them about the legacy left by their grandad and, if they are lucky, a bit more added on top.

Assuming they are only averagely lucky, the 'bit more added on top' (a £25 prize, less frequently than every two years) is very unlikely to allow their balance to keep up with inflation.

If we have inflation at 3%, the money that was worth £800 to their granddad may only be worth £550 in real terms to the five year old when they turn 18, because things get more expensive over time - so it would be sensible to use an investment product that has a chance of growing to equal or beat inflation.

A Junior S&S ISA or S&S CTF invested in a medium risk investment fund, would seem to fit the bill if the OP doesn't want anything 'high risk'.

As the return would be expected to be greater than the average returns on premium bonds, there would be nothing to stop the children who receive the money at age 18 from spending their 'excess' returns on a few lottery tickets, if they really want an incredibly tiny chance to win a life-changing amount of money.

Flobberchops

For simplicity assume the kids will get their money at 18. Open them a Junior ISA each. 3.6% or whatever isn't half bad. If the amount was larger, or you were planning on making regular additions, I would say think about stocks and shares, but if you want to keep things simple then just stick it in a cash JISA and forget about it for 8/11/13 years!

Malthusian

Zero_Sum wrote: »

Youre not really hiding or committing fraud. The money will still be in the kids name, they just wont know they have it.

Ignorance is no defence under the law if you claim benefits to which you're not entitled because money that you own but don't know about pushes you over a threshold.

The child would be liable for any repayment and penalties and would have to pursue their parent for the losses in turn.

stephenadarglas wrote: »

As a lasting memory to their grandfather then I suggest Premium Bonds as, with all due respect, the amounts are not life changing as they are.

£800 plus up to 13 years' worth of capital growth would be enough to buy an old banger and significantly improve their job prospects, or start a cottage business, or go backpacking and expand their horizons.

If you want a life-changing sum of money then you don't start by wasting what you've got so far.

Dumping the money in Premium Bonds would violate the OP's legal duty to invest the money as a prudent businessperson would.

System

Keep_pedalling wrote: »

It only costs a couple of quid to get a copy of a will. Would you risk a family bust up over a small inheritance?

If the OP kept the money in their own name the children might never see it. If the died or lost mental capacity no one else is going to know it exists. If they ran into financial difficulties it might get taken by creditors.

From personal experience, I think if it's kept secret for as long as possible, it's better. If they do know it exists and tell their friends, it can cause issues. We have a good amount put by for our son in a CTF (enough for at least two years at Uni, and hopefully three by the time he hits 18) and the idiot company who run it (naming no names) addressed the statement to him. As the annual statement arrives around birthday time, there is no reason why he shouldn't have opened it ………. I just wish he hadn't!!! It was a couple of years ago and he was just 12 years old and told all his school friends he was going to be "loaded" at 18. What seems like a very comfortable amount to an adult is riches beyond compare to a twelve year old. We are still trying to put it all in perspective for him now but at the back of his mind it's still "money's no object".

My biggest worry is that as he is one of the oldest in the school year he will reach 18 well before he takes his A levels (if indeed he does A levels ) and the carrot of doing well and getting a good place at university or a good job will not be quite so effective if he is already financially sorted before he leaves school. Hey ho! First world problems, eh?

AnotherJoe

Mrs_Arthur_Crown wrote: »

From personal experience, I think if it's kept secret for as long as possible, it's better. If they do know it exists and tell their friends, it can cause issues. We have a good amount put by for our son in a CTF (enough for at least two years at Uni, and hopefully three by the time he hits 18) and the idiot company who run it (naming no names) addressed the statement to him. As the annual statement arrives around birthday time, there is no reason why he shouldn't have opened it ………. I just wish he hadn't!!! It was a couple of years ago and he was just 12 years old and told all his school friends he was going to be "loaded" at 18. What seems like a very comfortable amount to an adult is riches beyond compare to a twelve year old. We are still trying to put it all in perspective for him now but at the back of his mind it's still "money's no object".

My biggest worry is that as he is one of the oldest in the school year he will reach 18 well before he takes his A levels (if indeed he does A levels ) and the carrot of doing well and getting a good place at university or a good job will not be quite so effective if he is already financially sorted before he leaves school. Hey ho! First world problems, eh?

If the "idiot company" had NOT addressed it to him, they would have been in all sorts of legal doo doo.
If you want to blame anyone, lay it at the foot of whoever left him the money if that was the original source or the parents who brought him up with no preparation for this such as expectations for what it would cost to live at uni, how he wont get a grant due to "money being no object" , etc etc. What is the usual debt leaving uni? Is it £30k now? How much does that compare to the CTF? have you explained that? Or the price of a house or rent. And you of course can charge him rent if he's so minted.

In any case the OPs sums are considerably different to yours since £800 is hardly going to lead to them running amok.

Marcon

You could always open a stakeholder pensions for each child. The way it ties up the cash until they are at least 55!

System

AnotherJoe wrote: »

If the "idiot company" had NOT addressed it to him, they would have been in all sorts of legal doo doo.
If you want to blame anyone, lay it at the foot of whoever left him the money if that was the original source or the parents who brought him up with no preparation for this such as expectations for what it would cost to live at uni, how he wont get a grant due to "money being no object" , etc etc. What is the usual debt leaving uni? Is it £30k now? How much does that compare to the CTF? have you explained that? Or the price of a house or rent. And you of course can charge him rent if he's so minted.

In any case the OPs sums are considerably different to yours since £800 is hardly going to lead to them running amok.

I'm not sure that I like your tone, Another Joe, but hey ho, this is a forum so I assume you are more polite in your face to face communications. The original post mentions the age of the children so their legacies have plenty of time to grow prior to their 18th birthdays so whilst it's £800 now, it could be considerably more when they receive the money.

As for your comment "if you want to blame anyone, lay it at the foot of whoever left him the money if that was the original source or the parents who brought him up with no preparation for this", he wasn't left the money, this has been accumulated by annual contributions into the original Child Trust Fund which the government kicked off with £500 for each child in the earlier years of the new millennium. We and his (now deceased) grandparents have been contributing to the fund since he was born. As his parents, we have encouraged our son at every step of the way to save his money and to be sensible and to budget. Before he hit his teens and his "common sense wiring" short circuited when all the teenage hormones kicked in, he was careful with his pocket money and his birthday and Christmas gifts, and he will be again, but currently with an increase in pocket money, and us leaving it to him to make any financial mistakes he needs to make to remind him the value of the money, with his newly acquired teenage attitude and his peers having new Nike trainers, expensive iPhones etc etc bought for them regularly, he struggles with temptation. I know it will pass and all will be well, but my simple comment that it's better to keep quiet about the money until a child / teenage brain can cope with that knowledge still stands.

Apologies to the original poster for hijacking the post.

Grumpygit

I tend to agree with the sentiment of not telling them - our daughter has been left 2 amounts inheritance by 2 people and we haven't told her - we are not in the UK so Junior ISA's are not available so i put the amounts in premium bonds which do win fairly regularly but only £25 at a go....it's more than the OP has for her children, but not life changing at a "bigger picture" level



If she knew she had it she would blow it on crap (she's 19 now) so we are saving it for when she either decides to move away (she's spoken about not staying here when she's qualified at her exams) or something else.


My parents have told her that their holding of premium bonds will be her inheritance and she's already said to me "I wonder if they would give me some early for a holiday" so I know that we are doing the right thing.


Deceitful maybe but we are protecting her from herself as I know if she had it and blew it she would regret it later on.