Inheriting money - gambling addiction

nightsky224

Soon a family member will inherit a chunk of money. They have a gambling addiction and have reached out to me as they want me to “look after” the money as they know they will slowly (or quickly!) gamble it away. 

They are on benefits, disabled and have mental health problems some benefits will stop as they will have this money so they need to be able to regularly draw on the money so they have an income. 

I don’t think them informally giving me the money is a good idea. Anyone know of other ways to keep his money safe? I was thinking maybe a trust but I don’t know much about them. 

Marcon

nightsky224 said:

Soon a family member will inherit a chunk of money. They have a gambling addiction and have reached out to me as they want me to “look after” the money as they know they will slowly (or quickly!) gamble it away. 

They are on benefits, disabled and have mental health problems some benefits will stop as they will have this money so they need to be able to regularly draw on the money so they have an income. 

I don’t think them informally giving me the money is a good idea. Anyone know of other ways to keep his money safe? I was thinking maybe a trust but I don’t know much about them. 

Gambling addiction is like any other addiction: it needs feeding.

Depends how much the chunk is - and how much pressure they will put on you to release funds. If you're talking about a few hundred pounds, that's one thing; if it many thousands, that's quite another. Could you give a rough idea? 

Purchasing an annuity might be a better idea than a trust. That way they won't be able to touch the capital and won't be able to put pressure on you. It can be done at any age, and needn't be for life - could just be for a fixed term up to (say) state pension age, depending on how old they are now.

nightsky224

Marcon said:

nightsky224 said:

Soon a family member will inherit a chunk of money. They have a gambling addiction and have reached out to me as they want me to “look after” the money as they know they will slowly (or quickly!) gamble it away. 

They are on benefits, disabled and have mental health problems some benefits will stop as they will have this money so they need to be able to regularly draw on the money so they have an income. 

I don’t think them informally giving me the money is a good idea. Anyone know of other ways to keep his money safe? I was thinking maybe a trust but I don’t know much about them. 

Gambling addiction is like any other addiction: it needs feeding.

Depends how much the chunk is - and how much pressure they will put on you to release funds. If you're talking about a few hundred pounds, that's one thing; if it many thousands, that's quite another. Could you give a rough idea? 

Purchasing an annuity might be a better idea than a trust. That way they won't be able to touch the capital and won't be able to put pressure on you. It can be done at any age, and needn't be for life - could just be for a fixed term up to (say) state pension age, depending on how old they are now.

It will be around 100k I think. Not thought of an annuity. They will need to be able to draw down from it (ideally monthly) to pay rent, live off etc. is that something that you can do with an annuity do you know? 

Keep_pedalling

Too late for a trust, that is something that the testator should have thought about when making their will. Is £100k enough to buy a small house or flat where they live? 

Olinda99

I believe an annuity is where you hand over a capital sum eg 100k in return for a fixed income each month

the amount of income you get is dependent on how long you want the annuity to run for and so on. get a couple of quotes and do the sums.

obviously once you hand the 100k over it's gone you can't get it back. all you can get back are the monthly payments

another option would be to put it into a long-term bond for example five-year or 10 year. this has the advantage that you will keep the 100k but obviously the monthly interest payments will be less than if you put it into an annuity.

tls123

Skipton building society have a trustee account perhaps that’s worth exploring 

bobster2

Olinda99 said:

another option would be to put it into a long-term bond for example five-year or 10 year. this has the advantage that you will keep the 100k but obviously the monthly interest payments will be less than if you put it into an annuity.

Long-term bond will mean the beneficiary has savings which will affect eligibility for means tested benefits. This might not be the case for some benefits if the asset was in the form of property where they living. Not sure of the situation for an annuity.

Keep_pedalling

bobster2 said:

Olinda99 said:

another option would be to put it into a long-term bond for example five-year or 10 year. this has the advantage that you will keep the 100k but obviously the monthly interest payments will be less than if you put it into an annuity.

Long-term bond will mean the beneficiary has savings which will affect eligibility for means tested benefits. This might not be the case for some benefits if the asset was in the form of property where they living. Not sure of the situation for an annuity.

Loss of means tested benefits can’t be avoided unless you spend the money on buying somewhere to live. An annuity would still impact benefits because of the income one would provide.

Unless this person is in their late 60s or older then an annuity is not a good solution. The younger you are the less they pay out and if they are under 55 you can’t purchase one. 

One possible option to avoid it all being squandered on gambling would be for this person to appoint an attorney to manage their savings. 

Keep_pedalling

tls123 said:

Skipton building society have a trustee account perhaps that’s worth exploring 

A trust is not an option, it would be treated as deliberate deprivation of assets. 

Olinda99

not sure why that would matter as the benefits people know they have the money and have adjusted benefits accordingly

RAS

Because with more than £16k in capital, they aren't entitled to any means tested benefits. They'd be expected to deplete that capital until they had less than £16k, whilst only spending on essential and other reasonable costs. So a new decent fridge is reasonable, a top of range American jobbie needing a second mortgage ain't.

Tying it up in a trust wouldn't leave the beneficiary able to access the capital, so they could starve and be homeless instead.