Helping out nephews and nieces for their futures – what would you do?

HorseWhisperer

Hello – this post may read like an inheritance one, but it’s actually a savings question…

I’ve just inherited a decent sum from my mum. I don’t have any kids of my own, and I am not married, though my will states that my very long term partner inherits my estate (yes, we know about the IHT issue, but that’s another issue not relevant here). My partner has (grown up) children but has left his estate to me, and they only inherit my/his combined estate when we’re both gone. We gave them their “inheritance” when we sold our previous house and bought a cheaper one so that they could put a decent deposit down on their first home.

My mum wanted at least some of her money which I’ve inherited to stay within her line of the family if unspent in my lifetime, rather than eventually being passed down to my partners kids, which I completely understand.

Initially I thought I would leave my nephews & nieces a small % in my will, but I’m now thinking about all the options, as the oldest would be 50 if I were to die at 80.

They are currently 20, 17, 14 and 11 years old and, just as we did with my partners children, it seems mad to make them wait until they are 40-60 years old when they could probably do with the money when they are younger to get on the property ladder/set up a business etc.

I’d like to put a couple of K into a LISA for the two eldest, but not sure about what to do about the younger ones. A Junior ISA seems a good choice, but then they may just blow it all at 18 when they can get their hands on it! Also, the younger ones’ parents are property developers who own lots of houses, so they will have no problem acquiring/being gifted their own homes.

Apart from me investing their share now (with tax implications for me) then handing it over when they need it later in life, what other options are there?

BTW my sister's and I inherited equal shares from my mum, so gifting some to my nephews and nieces is just a gesture.

subjecttocontract

In my experience it's a good idea not to let them inherit at to young an age and I think 18 is to young. I'd want them to be responsible adults and everyone matures differently. So, if it were me I'd try to arrange things so they received the money at 25.

MX5huggy

Ball park how much were you thinking because giving an 18 year old access spend £4k on a holiday and a car may different from £40k on 10 holidays 4 cars and a small pile of the white stuff. 

Albermarle

There have been numerous other threads along similar lines.
Some think that them having access to some money at 18, is no bad thing. If they blow it then they learn a lesson. Although as the previous poster is intimating, it could depend on the amounts involved.

So, if it were me I'd try to arrange things so they received the money at 25.

If you want to go down this route, you have limited options. Possibly a trust , but this would be complicated and expensive. Otherwise you have to just save/invest the money yourself and give it to them when appropriate.

I’d like to put a couple of K into a LISA for the two eldest

You can not open a LISA for them, and they would have to be 18 to open one.

enthusiasticsaver

It depends on how much you are intending to distribute between them.  Presumably their own parents will also be looking at this from their own inheritances too?

Personally I would decide how much of your inheritance is earmarked  for them.  What you do now depends on how much you intend to give them.  If it is just a few thousand I would give it to the 2 older ones now and invest the same amount for the other 2 to give them at 18.  If it is 10s of thousands then I would maybe give them some at 18 and some at 25.  

MikeJXE

November 2021 was my 81st birthday and I am reasonably fit but the law of averages says I don't have a lot of years left yet I could get to high 90s 

I don't want for anything and have everything I need including a luxury car, I live alone in a rented flat, state pension. 

I have 2 sons 53 and 45 plus 4 grandchildren 21 15 14 and 12 years old.

I also didn't want to wait till I died for them to get part of what I had, my will is split equal 6 ways. 

My eldest could even die before me

I did the maths, £130,000 in the bank and I didn't need it all

Christmas 2021 I decided to give £60,000 away to the kids, £10,000 each in a Christmas card..

The younger ones the money was put in a junior isa for when they are 18, they will be adults then and if they make mistakes thats their choice

What I got out of it I wouldn't have got if they received the money after I died 

Was the look on their faces.

Priceless. 

bostonerimus

I'm single and I've done my trust and a will to leave my money to a couple of charities and my nieces, some specific bequests also go to friends and my ex-wife, so that's all sorted. However, I live in the US and want to reduce the value of my estate for IHT purposes and also give money to my grand nieces and nephews. The US has a generous gift allowance so I give them money each Christmas and when they reach college age I will talk to them and their parents about what I can do to help.

Jami74

MikeJXE said:

Christmas 2021 I decided to give £60,000 away to the kids, £10,000 each in a Christmas card..

That is such a lovely thing to do, but they must have been some bloody massive envelopes!

TojoRalph

First off, I am going to assume that all parties involved are level headed individuals free from addictions, Etc. On that basis, my take on things and what life has taught me is that the earlier in life you get "money", the more value it has and the more you get from it. For example, £5k at age 25 may fund a dream back packing holiday and a lifetime of memories, whilst £5k at 50 just means that you get a few extras on the spec of a new car. Never underestimate the power of a wee cash handout when it is needed. 

HorseWhisperer

MX5huggy said:

Ball park how much were you thinking because giving an 18 year old access spend £4k on a holiday and a car may different from £40k on 10 holidays 4 cars and a small pile of the white stuff. 

Max £3k each

HorseWhisperer

TojoRalph said:

First off, I am going to assume that all parties involved are level headed individuals free from addictions, Etc. On that basis, my take on things and what life has taught me is that the earlier in life you get "money", the more value it has and the more you get from it. For example, £5k at age 25 may fund a dream back packing holiday and a lifetime of memories, whilst £5k at 50 just means that you get a few extras on the spec of a new car. Never underestimate the power of a wee cash handout when it is needed. 

My thinking exactly.