Kids have received an inheritence

root

Exodi said:

Weedavey72 said:
Thankfully none are keen to blow it on a summer in Ibiza 😂

For now, but I'd still ensure they stay on the straight and narrow.

This forum has had countless threads, and I have personal experience of younger people receiving an inheritance and absolutely racing through it.

Takeaways every day, nights out every weekend, luxury designer goods, etc. 

They say 70% of lottery winners end up broke, and a third go on to declare bankruptcy. The fundamental reason is that they do not have respect for the money. How can they?

Most people work day and night for money. They're unlikely to drop £15k on a Rolex because they know that much money might take over half a decade of working a full-time job to save. Someone that has had the money given to them does not feel that burden or appreciate it.

My aunt (who had generally otherwise had a life on benefits) received a sizable inheritance (I believe it was around £180k) and unfortunately squandered all of it within 2 years. She paid off some debts (for the record - I think this is a very good idea), but then after went on fancy holidays (for example, a 4 week trip to Barbados), used HelloFresh + Takeaways for all meals, privately rented a gorgeous 5 bedroom house in a posh area (for 2 people) and paid a years rent in advance for her daughter, and these are the things we knew about. I think just over 2 years later she had moved back into subsidised accommodation, being unable to afford the rent. Easy come, easy go as they say.

With £42k, it gives them all a house deposit and the ability to take driving lessons, buy a car and insure it. It really is an incredible gift. I'm sure they are sensible children, but they are still children - I would not take my eye off them! Kids can be a bit brand obsessed, especially in today's social media era where personal image is everything to kids.

I have personally witnessed around 32k burnt through in less than 2 years on takeaways and designer clothes.

For some reason whenever this topic comes up in the forums, it always seems that the prevailing opinion is 'its their money' which of course it is, but its still nuts giving that kind of money to someone who has not had to work for it and therefore does not appreciate or understand the value of it.

Exodi

root said:

Exodi said:

Weedavey72 said:
Thankfully none are keen to blow it on a summer in Ibiza 😂

For now, but I'd still ensure they stay on the straight and narrow.

This forum has had countless threads, and I have personal experience of younger people receiving an inheritance and absolutely racing through it.

Takeaways every day, nights out every weekend, luxury designer goods, etc. 

They say 70% of lottery winners end up broke, and a third go on to declare bankruptcy. The fundamental reason is that they do not have respect for the money. How can they?

Most people work day and night for money. They're unlikely to drop £15k on a Rolex because they know that much money might take over half a decade of working a full-time job to save. Someone that has had the money given to them does not feel that burden or appreciate it.

My aunt (who had generally otherwise had a life on benefits) received a sizable inheritance (I believe it was around £180k) and unfortunately squandered all of it within 2 years. She paid off some debts (for the record - I think this is a very good idea), but then after went on fancy holidays (for example, a 4 week trip to Barbados), used HelloFresh + Takeaways for all meals, privately rented a gorgeous 5 bedroom house in a posh area (for 2 people) and paid a years rent in advance for her daughter, and these are the things we knew about. I think just over 2 years later she had moved back into subsidised accommodation, being unable to afford the rent. Easy come, easy go as they say.

With £42k, it gives them all a house deposit and the ability to take driving lessons, buy a car and insure it. It really is an incredible gift. I'm sure they are sensible children, but they are still children - I would not take my eye off them! Kids can be a bit brand obsessed, especially in today's social media era where personal image is everything to kids.

I have personally witnessed around 32k burnt through in less than 2 years on takeaways and designer clothes.

For some reason whenever this topic comes up in the forums, it always seems that the prevailing opinion is 'its their money' which of course it is, but its still nuts giving that kind of money to someone who has not had to work for it and therefore does not appreciate or understand the value of it.

Agree with what you said, and yes there does seem to be a vocal part of this forum that advocates letting them waste it (with the idea being that they learn a lesson from it). I'm not even completely against that stance if the amount was less, but this would be an expensive lesson.

We have many young people in our family around the 18 year old mark, and as per your example, they are takeaway and designer brand obsessed. One unashamedly tells us she orders at least one takeaway a day... she also pleads poverty all the time.

The 17 year old boy in our family refuses to be seen in anything that isn't designer and constantly jokes about how I wear 'poor people clothes', because it doesn't have a logo on the front.

I shudder to think if these two ever got their hands on a sizable amount of money.

Of course, not all children are the same, I'm sure there are some virtuous children who are very good with money. But I'd say that young people are famously bad with money, and guess that there's going to be significantly more youngsters who waste the money on nights out than those who would invest it in a global index fund.

eskbanker

root said:
For some reason whenever this topic comes up in the forums, it always seems that the prevailing opinion is 'its their money' which of course it is, but its still nuts giving that kind of money to someone who has not had to work for it and therefore does not appreciate or understand the value of it.

Are you referring to the deceased who'd stipulated that in their will, or the parent trying to exert control over its distribution?

Exodi

eskbanker said:

root said:
For some reason whenever this topic comes up in the forums, it always seems that the prevailing opinion is 'its their money' which of course it is, but its still nuts giving that kind of money to someone who has not had to work for it and therefore does not appreciate or understand the value of it.

Are you referring to the deceased who'd stipulated that in their will, or the parent trying to exert control over its distribution?

I think this response is the type of response root is alluding to.

At least in my elderly stepfathers case, it would not be his preference for his beneficiaries to put all the money up the wall either. He fortunately had a good will-writer who discussed trusts with him to facilitate these wishes, though many do not.

I think it's likely that many deceased would prefer if the result of their lifetime of work wasn't immediately spaffed up the wall, which I'd hope is not a controversial thing to say as I'm sure it's something we can all understand - though you're free to argue the technical line that 'if they wanted the money to be restricted, they should have included a trust in their will'.

As far as I can see, root is not suggesting not giving the beneficiaries their rightful inheritance - it's more the latter in your question, though for the record, I don't believe anyone is suggesting withholding the funds either. More to steer them in the right direction ,as a parent should with all things.

But we should not have this debate because it comes up ad nauseam on this forum, I don't want to engage in it the zillionth time. Yes once they're 18 they are legally adults, etc, etc. Unfortunately 18 year olds are not renowned for their financial prudence.

eskbanker

Yes, I wasn't advocating another rerun of the same old debate, but simply seeking clarification about what they actually meant by 'giving'!

Weedavey72

Hi everyone. Thanks for all the comments and good advice. Certainly some good for thought and eye openers around the horror stories. 

Thankfully all of my lads are level headed and to be honest despite knowing about the money for almost a year (as it went through probate) have never once asked about it or when it’s coming. Now that’s it arrived we have a family meeting at the weekend to share ideas and offer advice to them. 

We will certainly consider the options given and also show them some of the not so good outcomes. 

Thanks everyone 

root

eskbanker said:

root said:
For some reason whenever this topic comes up in the forums, it always seems that the prevailing opinion is 'its their money' which of course it is, but its still nuts giving that kind of money to someone who has not had to work for it and therefore does not appreciate or understand the value of it.

Are you referring to the deceased who'd stipulated that in their will, or the parent trying to exert control over its distribution?

the last time I was involved in this topic personally was another JISA thread where I pointed out that when the child turns 18 the money is theirs. The point being that that could backfire spectacularly if the parent perhaps expected the money to be used for a house deposit or car, when in fact at that point the 18 yr old has full control.

root

Exodi said:

eskbanker said:

root said:
For some reason whenever this topic comes up in the forums, it always seems that the prevailing opinion is 'its their money' which of course it is, but its still nuts giving that kind of money to someone who has not had to work for it and therefore does not appreciate or understand the value of it.

Are you referring to the deceased who'd stipulated that in their will, or the parent trying to exert control over its distribution?

I think this response is the type of response root is alluding to.

At least in my elderly stepfathers case, it would not be his preference for his beneficiaries to put all the money up the wall either. He fortunately had a good will-writer who discussed trusts with him to facilitate these wishes, though many do not.

I think it's likely that many deceased would prefer if the result of their lifetime of work wasn't immediately spaffed up the wall, which I'd hope is not a controversial thing to say as I'm sure it's something we can all understand - though you're free to argue the technical line that 'if they wanted the money to be restricted, they should have included a trust in their will'.

As far as I can see, root is not suggesting not giving the beneficiaries their rightful inheritance - it's more the latter in your question, though for the record, I don't believe anyone is suggesting withholding the funds either. More to steer them in the right direction ,as a parent should with all things.

But we should not have this debate because it comes up ad nauseam on this forum, I don't want to engage in it the zillionth time. Yes once they're 18 they are legally adults, etc, etc. Unfortunately 18 year olds are not renowned for their financial prudence.

Absolutely. I am not saying they should not receive inheritance/JISA etc.

Purely that it's a fact that the brain isnt fully developed at that age, secondly, assuming that the 18yr old has basically zero idea on the value of money and how hard it can be to accumulate. 

Again, I am speaking from first hand experience.

And finally, this is not a 'holier-than-thou' thing, I would absolutely have 'spaffed it up the wall' if I had been given any amount of money at that age.

Nardy

A long term term view would be to put some of the money in a pension.

A year ago my son put some money in a pension fund for his daughter, She is now 15 months old.

Keep_pedalling

Nardy said:

A long term term view would be to put some of the money in a pension.

A year ago my son put some money in a pension fund for his daughter, She is now 15 months old.

It is fine for a parent to put their own money into a pension for a child, but they can’t do that with money that has been left to their children.