Money Moral Dilemma: I've put my mum's money into Premium Bonds - who gets the prize if it wins?

_nate

So if your mother put the money in an interest account, you'd skim off the interest due to her friend, would you?

Perhaps you should just cut to the chase and withdraw the whole lot and go down the casino.

friolento

https://forums.moneysavingexpert.com/discussion/comment/81898056#Comment_81898056

When it comes to money in accounts, ownership is determined by law, not by morals. The legal owner is the account holder, and the money will be part of the account holder's estate upon their passing.

The person asking seems to assume that they will survive their mother - something which statistically happens more often than the other way round but is clearly not guaranteed. Similarly, the intended beneficiary might pre-decease the mother. What is supposed to happen with the money in these scenarios?

Erica51

Why on earth doesn't your mother give her friend the money now so she can enjoy it? If she doesn't need it what is the point of passing it to you to look after?

bikaga

Why not ask your mum? I'm assuming she doesn't need money if she can afford to give it away early, but she might still appreciate a weekend away or a nice bottle of champagne.

ripongrammargirl

Why has your mum given you the cash instead of giving it away herself or made a will to stipulate her wishes? All very odd. Personally I wouldn’t put it into premium bonds as the return value/chance of winning is so poor. Put it into an ISA or savings account as you will get better returns but please ask your mum what to do with the interest as it’s her cash!

Scrimboblik

If Mum gave the money then safety indicates that it must be kept securely. This means it should be deposited into a bank until it is required. Premium bonds may generate prizes in a similar way that bank accounts can generate interest. The funds were given to pass on and as long as that are passed on in the spirit they were given then I cannot see an issue retaining the sum in bonds. Bank interest would be hours and so would prizes.

Kim_13

https://forums.moneysavingexpert.com/discussion/comment/81898249#Comment_81898249

I can see more of a logic to keeping at least part of the interest- it would be taxed as if it belonged to the child looking after the money, so could well leave them out of pocket if they did not keep their marginal tax rate from the interest, depending on their own tax position. But Premium Bonds are tax free and if you expect to be paid for helping someone out, that should be agreed in advance.

While legally the money in an account in a person’s name becomes their property (I assume the post was supposed to read yours instead of hours) it is whether that is the moral thing to do that is the question here. As they have felt the need to ask, that suggests that it is not (at least not without asking mum what she would like to do with any winnings while they are still hypothetical.)

Scrimboblik

https://forums.moneysavingexpert.com/discussion/comment/81898340#Comment_81898340

The response was specifically in tune with the dilemma as stated. Of course it would be good to offer any share as deemed appropriate, especially if the win was substantial. As for the complexities of the transaction; if thought was applied to crossing all the 't' etc then a Last Will & Testament may be the best option. No indication of the initial amount was mentioned, nor the amount of any winnings; all omitted to complicate the diemma and make of it what we will. Good excercise in moral consideration though. 😀

SWGranny

If the money is your Mum's, then the interest or prize money is hers too. If your Mum is not in need of it, and just wants it to go to her friend after her passing, then the interest or prize money goes to the friend, unless agreed otherwise with your Mum.

Like other comments, I don't understand why your Mum doesn't put her request in her Will.

Rocketdogroya

I get the feeling it is possible mum is starting to deteriorate mentally and daughter maybe her executor. She wants a friend to have a lump sum on passing but daughter has chosen to save it in bonds. I think this is why she cant just 'ask mum'.

I dont see this as hiding her assets or why would O/P suggest giving the mum back winnings?. If its small I would put it back into bonds and then has more chance of a big payout. At the time of handing it our split it 50/50 between you and the friend.

If its a big win it is way more complicated. Depends on the financial situation all 3 of you are in. Would the payment effect any benefits, IHT or care costs. If that is the case the the gift of money maybe a negative but lavish gifts maybe more acceptable. Buying the friend a new car, kitchen, or conservatory etc.