11 year old son has inherited a lot of money

brightonbird

Hi there,

I can’t quite believe the position we’re in, which I know is incredibly fortunate. I feel bad for even feeling it’s a problem.

However my son has just inherited a large sum, we won’t know exactly how much for a while, but at least £150,000, possibly much more. 

Rather than this being amazing news, I’m now worrying a lot about how this will shape the person he becomes.

My background is not an overly prosperous one, in-fact I spent large parts of my 20s and 30s in considerable debt. So I’m finding it hard to process this news and the impact it will have on him.

My questions are, can I postpone telling him until he’s older than 18? I can’t see how having lots of money can positively impact his growth as a person at 18. 

My second question, is do I tell him soon so he has time to process it and let us instil in him what that money will go towards (and it not feel like a huge money splashing celebration when he’s 18). Or do we wait so that he has at least has some time in his life of having to think about how he’s going to make something of his life without having loads of money?

Also, just any general advice on how to handle this situation is greatly received! 

I just keep thinking how being a poor student really taught me the value of money, and how he’ll miss that experience. Which is crazy, I should be over the moon for him!

thegreenone

You need to wait until the final amount is confirmed AND whether the Will states that it should go in a trust or not.  If he can't access the money until he's 25, I don't think I would say anything.

[Deleted User]

You'll need to put it into trust for him.

But I would talk to him about it, so he knows when to expect it and it'll also be a good chance to talk about money and give him some time to think. He'll be a lot less inclined to blow the lot hopefully than if the first he learns of it is when you hand it all over on his 18th birthday.

doodling

Hi,

Assuming that he has inherited unconditionally and the will doesn't explicitly set up some kind of trust (i.e. there aren't, for example, any conditions in the will that say that he has to live to the age of 21, otherwise the money will go to someone else) then the money will need to be placed in trust (probably with you and / or the executor of the will as trustees) and given to him when he reaches 18.

If the money is solely for his benefit then he is entitled to receive it at 18, even if the will states some other age.

How you tell him about it is up to you, but I don't believe that there is any requirement to tell him about it until he reaches 18.

You need to have a discussion with whoever the trustee will be to understand what their approach will be.  If that person is you then I suggest you take both legal advice, to understand your responsibilities in looking after the money, including whether it will need to be paid at 18 and financial advice to identify suitable investments to hold the money and whether there will be tax issues to manage.

Spendless

You could 'drip feed' him in the information over time. At 11 you could just make him aware that there is money 'for his future' to come to him. As he gets older and starts talking about any hopes/desires/dreams he has then you can add in more information

Keep_pedalling

If the will leaves him the money outright, he is entitled to it when he reaches 18 (16 in Scotland) and not only don’t you have any right to keep it from him, he will be responsible for any tax payable on any income it generates. 

Often wills do state an age when a beneficiary should receive their inheritance, but that is not always enforceable.

With such a large sum I would recommend you take professional advice of where to place the money in trust. 

theoretica

I believe he, as a legal adult, has a right to this information and most likely the money at 18.  He may also need to take responsibility for tax on it so need to know.

Other routes the information could come to him are worth thinking about.  Is he the only person to inherit, or did cousins or other relatives too who might talk about it?  I had a friend who was not told about money she inherited until she was 18, but had worked out both that it existed and an idea of how much.

With that sort of sum and timescale it may well be advisable to invest through a financial advisor - which will give your son another source of advice at 18 too. 

Sandtree

Does that mean you've inherited a similar or larger sum? Money often flows down the family chain with younger generations getting less than older 

tacpot12

I would strongly recommend telling him about it now, and explaining that he it will not be able to get access to it until he is 18 (or what ever the will says). 

Even if the Will says he can't have until he  is 21, 22 or 25, the law says he can have it when he is 18. It would be as well to talk to him regularly about what he should do with the money, and regurlaly remind him that it is likely that he will only get this sort of inheritance once. If he spends it wisely, e.g. by buying a house, he will have an asset that will apprecaite in value. If he fritters it away he will have nothing. 

If the money is placed in trust for him, he can also have access to it if there is something that would really benefit him, so as a training course, or ven school fees if he wanted to go to a private school. But the best thing for him will be to hang on to it for as long as possible, until he knows where he wants to live permanently and to then buy a house with it.

You could also consider investing it for him (if you are to be the trustee). Again, I would involve him in the decision whether to invest it. The main thing he needs to learn about investing is that investments can be volatile (go up and down in value) and this means that there will be good times to sell the investments and bad times. He really needs to be happy that he can wait until it is a good time to sell, even if this means waiting a couple of years for a market crash to recover. 

I would not advise investing all the money. Perhaps £30-40,000 should be kept as cash savings, and used in case he wants to go to University. Planning to allow him (and even encourage him) to spend a bit when he is 18 might allow him to be happier with leaving the rest of the money untouched. 

oystercatcher

With good financial education there is no reason to think he would spend all the money as soon as he has access. I know plenty of young people who have inherited money but still use it wisely and use it for buying a home or whatever after they have completed uni and living in a similar way to everyone else there. Financial education starts very early on, start teaching him to think about what he needs and how to use money wisely and budget for things he wants or needs. Tell him the money is there but that it's to go towards his first home and maybe driving lessons and a car when he is old enough , these things will help him improve his career chances. Teach him now how to moderate party type spending and hopefully the lessons will last.

Mimi_Arc_en_ciel

brightonbird said:

Hi there,

I can’t quite believe the position we’re in, which I know is incredibly fortunate. I feel bad for even feeling it’s a problem.

However my son has just inherited a large sum, we won’t know exactly how much for a while, but at least £150,000, possibly much more. 

Rather than this being amazing news, I’m now worrying a lot about how this will shape the person he becomes.

My background is not an overly prosperous one, in-fact I spent large parts of my 20s and 30s in considerable debt. So I’m finding it hard to process this news and the impact it will have on him.

My questions are, can I postpone telling him until he’s older than 18? I can’t see how having lots of money can positively impact his growth as a person at 18. 

My second question, is do I tell him soon so he has time to process it and let us instil in him what that money will go towards (and it not feel like a huge money splashing celebration when he’s 18). Or do we wait so that he has at least has some time in his life of having to think about how he’s going to make something of his life without having loads of money?

Also, just any general advice on how to handle this situation is greatly received! 

I just keep thinking how being a poor student really taught me the value of money, and how he’ll miss that experience. Which is crazy, I should be over the moon for him!

It depends on what the will states. 

However I will give you a little bit on my own personal situation. 

I inherited my house when I was 30. I'm now 38. I knew, from a very young age that I was going to get this inheritance and it was not a case of IF I get it, but WHEN (I know that sounds awful!) 

What that meant was that I didn't have to stress about saving for a deposit, however, it also meant I didn't save either. I got in debt (and I am still in debt - this wasn't because I went out splashing cash, I made a very silly mistake of letting my ex run my finances for me and wasn't really aware of how much debt we was in. I am now living comfortably and paying the debts off) 

My children will inherit my house. They know this (They are 10 and 14) but what I have done from a very early age is shown them how to budget their pocket money, how to save money and be responsible. They know I am in debt, they know i owe the bank and they know about APR's (at a very dumbed down level) 

I would personally tell the child but ensure that they have their head screwed on. I'd start teaching them about money and budgeting and living with in your means. 

That said - you can do all of this and they can still blow the lot within a few months. Steering them in the right direction now would be an amazing leg up though