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  • FIRST POST
    • triplea35
    • By triplea35 19th May 19, 7:25 AM
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    triplea35
    Leaving Estate to a spendthrift son.
    • #1
    • 19th May 19, 7:25 AM
    Leaving Estate to a spendthrift son. 19th May 19 at 7:25 AM
    My wife and I are in our early 60's. We are quite comfortable, we own our home outright, live off my defined benefit pension, and have joint savings/investments over the combined Inheritance allowance. I continue to work, and we both have State Pension to look forward to in a few years, so our savings continue to grow. Unless one or both of us are hit by considerable care costs in later life we should leave a reasonable estate to our sole adult son.

    I do feel that he would blow his inheritance without much thought to the effort we have put in to accrue it over the years. He is actually due a small inheritance soon from an Aunt so will be interesting to see what he does with it.

    To reduce liability to Inheritance Tax and to provide for his long term future one idea I came up with was to gift him monies by loading a pension in his name. His own pension is, and will likely remain, a very modest auto enrolled workplace pension. The benefit of gifting him pension contributions up to his current salary each year is that he gets tax relief on the contributions, it will grow and he cannot access it until 57 years of age.

    My wife and I are in total agreement over the above course of action but it is what we should do about the remainder that is creating discussion.

    Our current 'mirror' wills were made years ago when our son was a child and appointed guardians/trustees/executors in the event of our joint demise until he was 21.

    It is about time we updated them. My view is that I would like to leave it in some form of trust, the savings invested and he be allowed a yearly allowance, say 4%. He would have the house to do with as he wished and a healthy annual income on top of his own earnings. My wife feels I am trying to be 'a little too controlling from the grave' and that when we are both gone it should be his to do as he wishes, and by that time hopefully he would be more mature and sensible with his attitude to money.

    I would welcome thoughts on this. Does anyone else have such worries?

    I appreciate we will have to discuss this with a solicitor. If we did go the trust route, all my friends/family who I would trust implicitly are a similar age or older so may not be around. Would we need a solicitor as trustee and an IFA to manage the finances?
Page 1
    • Sea Shell
    • By Sea Shell 19th May 19, 7:36 AM
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    Sea Shell
    • #2
    • 19th May 19, 7:36 AM
    • #2
    • 19th May 19, 7:36 AM
    I can see both sides here, but I would agree with your Wife on the whole.

    The problem is that what you feel would be a problem now, might not be a problem in 20-30 years time, as he, hopefully, would have matured into a sensible man. (how old is he now?)

    If you do go down the "control" route now, i'd suggest making a date in your diary to re-do your wills in say 10-15 years time, if you feel his circumstances have changed. However, you run the risk of not having capacity to change your will in the future.

    As for the Aunt's inheritance. Don't be too hard on him if he decides to buy a car, or go on holiday with the money, rather than invest it in his pension, or use it for a deposit on a house!!!

    Is he just a typical young lad? Not into gambling, drugs or anything really bad, as that really is a whole other kettle of fish!!!
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • Flugelhorn
    • By Flugelhorn 19th May 19, 7:48 AM
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    Flugelhorn
    • #3
    • 19th May 19, 7:48 AM
    • #3
    • 19th May 19, 7:48 AM
    I can see where your concerns are coming from, we will probably be leaving the kids enough to keep them going for quite some time - however they aren't big spenders so I am not worried, and anyway we won't be around to see what happens

    A relative told me a couple of things many years ago 1) your children are not the same as you 2) your children owe you nothing . I reckoned that once you realise that then the relationships with kids and their behaviour are much easier to understand.

    You mention the one son ... making assumptions here but as an only child myself I am conscious that parents tend to assume you will be like them and can, I think, sometimes be more controlling
    • triplea35
    • By triplea35 19th May 19, 7:58 AM
    • 258 Posts
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    triplea35
    • #4
    • 19th May 19, 7:58 AM
    • #4
    • 19th May 19, 7:58 AM
    Thanks Sea Shell. He is 27, and comes across a little immature for his age. He does have quite a responsible job in hospitality but due to the long/late hours involved he does like to go drinking with colleagues into the early hours and one place they do frequent is the local Casino! He assures me that he only has small flutters on Blackjack but is very secretive about his day to day spending so hard to know.
    He has just come out of a long term relationship so is burning the candle at both ends at the moment.
    • Keep pedalling
    • By Keep pedalling 19th May 19, 8:00 AM
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    Keep pedalling
    • #5
    • 19th May 19, 8:00 AM
    • #5
    • 19th May 19, 8:00 AM
    Do you have or are likely to have any grand children?

    If the answer to that is no, then why worry if you son splurges the lot? If you have GC then you have the option of passing on some of your wealth directly to them.
    • triplea35
    • By triplea35 19th May 19, 8:08 AM
    • 258 Posts
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    triplea35
    • #6
    • 19th May 19, 8:08 AM
    • #6
    • 19th May 19, 8:08 AM
    Do you have or are likely to have any grand children?

    If the answer to that is no, then why worry if you son splurges the lot? If you have GC then you have the option of passing on some of your wealth directly to them.
    Originally posted by Keep pedalling

    Yes no grandchildren at the moment, nor on the horizon!
    • Keep pedalling
    • By Keep pedalling 19th May 19, 8:18 AM
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    Keep pedalling
    • #7
    • 19th May 19, 8:18 AM
    • #7
    • 19th May 19, 8:18 AM
    Although paying into a pension for him with your excess income sounds a good idea you need to be careful about exceeding any limits which is difficult to do if you don’t know what his own arrangements are.

    If he does not already own his own home have you considered gifting a deposit on one? Once in bricks and mortar it can’t be spent to easily.

    If you feel you need to delay gifting as long as possible consider a 2nd death life policy which will cover any IHT payable should you both die an untimely death. These are the sort of options you should consider discussing with an independent financial advisor.
    • getmore4less
    • By getmore4less 19th May 19, 8:35 AM
    • 36,249 Posts
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    getmore4less
    • #8
    • 19th May 19, 8:35 AM
    • #8
    • 19th May 19, 8:35 AM
    MY approach would be
    If I don't want my child wasting it I might as well waste some

    My wife and I are in our early 60's. We are quite comfortable, we own our home outright, live off my defined benefit pension, and have joint savings/investments over the combined Inheritance allowance.
    You are sitting on 1m+

    have income from multiple sources, pension, work, state pension...

    live off my defined benefit pension.... I continue to work, and we both have State Pension to look forward to in a few years, so our savings continue to grow.

    Get spending.

    You never know when mobility or illness will hit you so make good use of your time now.


    unless your son marries and has kids his nil rate band will be 325k/500k so there is a bigger tax bill looming.


    Our current 'mirror' wills were made years ago when our son was a child and appointed guardians/trustees/executors in the event of our joint demise until he was 21.
    that does not always work as unless water tight he can access at 18.
    (chances are he will be over 21 anyway unless you had him very late)
    (Edit: 27 already)

    It is about time we updated them. My view is that I would like to leave it in some form of trust, the savings invested and he be allowed a yearly allowance, say 4%. He would have the house to do with as he wished and a healthy annual income on top of his own earnings. My wife feels I am trying to be 'a little too controlling from the grave' and that when we are both gone it should be his to do as he wishes, and by that time hopefully he would be more mature and sensible with his attitude to money.


    The problem with control from the grave is the what if's any trust discretion has to allow for a lot of scenarios.

    eg. what if he marries and the wife becomes disabled and he has to give up work to be a carer, will 4% be enough?

    Your second issue is to lock it in properly you will have to have succession plans in place for what happens when your son dies.

    Where do you want all this money you are trying to protect to go next?

    Now you are trying to control 40-50+ years ahead is that really practical?


    It can be really hard to transition from saver to a spender but that is what you need to do before it is too late.

    There is probably no need to keep accumulation if the house/other asset balance of the 1m+ is OK

    Time to stop accumulating and at least start using up the income

    Make life more comfortable

    employ a cleaner/gardener
    holidays up the quality, travel business
    eat out a bit more
    go to the theatre more
    .......

    look at the rules for gifting from income so you don't leave a problem for your executor.

    You probably have enough that all three off you could retire and never need to work again.
    Last edited by getmore4less; 19-05-2019 at 8:41 AM.
    • getmore4less
    • By getmore4less 19th May 19, 8:39 AM
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    getmore4less
    • #9
    • 19th May 19, 8:39 AM
    • #9
    • 19th May 19, 8:39 AM
    Thanks Sea Shell. He is 27, and comes across a little immature for his age. He does have quite a responsible job in hospitality but due to the long/late hours involved he does like to go drinking with colleagues into the early hours and one place they do frequent is the local Casino! He assures me that he only has small flutters on Blackjack but is very secretive about his day to day spending so hard to know.
    He has just come out of a long term relationship so is burning the candle at both ends at the moment.
    Originally posted by triplea35
    The more you pry the more secretive he will become.

    Does he have a house/mortgage?
    Any sign the bills are not getting paid.

    One of the reasons they may be hitting the casino it will be one of the few places you can go late into the morning that is not a night club.
    • Keep pedalling
    • By Keep pedalling 19th May 19, 8:58 AM
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    Keep pedalling
    Agree with GM4L, stop accumulating and start spending. We are in a similar situation with an estate over the joint nil rate bands, and there is little point in trying to accumulate more. Fully retired spend generously on ourselves give generously to our children, grandchildren and charities and holding enough back for our dotage when if necessary we can afford live in careers or a high quality care home.

    The main reasons you save is to be able to help your children and live comfortably in old age, but people seem to forget the second bit.
    • Tigsteroonie
    • By Tigsteroonie 19th May 19, 9:12 AM
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    Tigsteroonie
    If you were to leave it in trust, what would you see happening to the main fund if your son were to die without a wife or children to inherit? What if he had children but those children grew up to be spendthrifts too?

    I think you have to accept that once you are gone, if your son is to inherit, then the estate should become his to do with as he wants. You won't be around to see it, and you won't be hurt if he does decide to put it all on red. That's ultimately his choice. You'll be dead.
    Mrs Marleyboy

    MSE: many of the benefits of a helpful family, without disadvantages like having to compete for the tv remote

    Proud Parents to an Au-some son
    • Mojisola
    • By Mojisola 19th May 19, 9:17 AM
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    Mojisola
    Instead of accumulating more money when you have enough for yourselves and anxieties about the use your son would make of it, why not find a couple of local charities you like and offer them regular financial support.

    If your son does then gamble the rest of your estate away, at least some of your money will have been put to good use.
    • getmore4less
    • By getmore4less 19th May 19, 9:34 AM
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    getmore4less
    If you were to leave it in trust, what would you see happening to the main fund if your son were to die without a wife or children to inherit? What if he had children but those children grew up to be spendthrifts too?

    I think you have to accept that once you are gone, if your son is to inherit, then the estate should become his to do with as he wants. You won't be around to see it, and you won't be hurt if he does decide to put it all on red. That's ultimately his choice. You'll be dead.
    Originally posted by Tigsteroonie
    That's one advantage of dealing with it while alive you can get the pleasure of seeing it used wisely or stop giving if not.

    A roof over his head may be a decent option to start with, but that just gives him more of his own money to fritter away if so inclined.

    Perhaps rather than worrying about what he may be doing is support any aspirations for his future life and assist as best you can from your life experiences.



    There is that saying when you see wayward kids and young adults, blame the parents.
    • Sea Shell
    • By Sea Shell 19th May 19, 10:21 AM
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    Sea Shell
    Actually on second thoughts, yes, spend it all on yourselves!!! Start to drop hints now that he shouldn't expect to get much because you've decided to become spendthrifts yourselves!!!

    At 27 he's a grown man, he'll have to look after himself!!
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • Flugelhorn
    • By Flugelhorn 19th May 19, 10:24 AM
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    Flugelhorn
    GM4L's post is quite right, though it is hard to change from saver to spender! after all that is how much of the money was accumulated

    Since realising that we were over the IHT threshold, I have bought two cars - still can't somehow buy new ones but they were still a lot more than I have spent on a car!
    • Gers
    • By Gers 19th May 19, 11:52 AM
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    Gers
    Spend on what you both want! A couple of years ago I was flying out to Australia to attend the funeral of a nephew aged 34, the son of my late brother. One of the other people on the plane said to me something along the lines of 'always fly first class otherwise your heirs will'!

    It's long been the case of spendthrift heirs losing all the family fortunes - think of the many country houses gifted over to the NT.

    You've both worked hard to accumulate, it would make sense to enjoy the fruits of your labour and stop worrying about what happens to your money after you're gone. That's no way to live!
    • Gavin83
    • By Gavin83 19th May 19, 1:04 PM
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    Gavin83
    He assures me that he only has small flutters on Blackjack but is very secretive about his day to day spending so hard to know.
    Originally posted by triplea35
    And why shouldn't he be? As long as he isn't coming to you asking for money on a regular basis what has his spending got to do with you? Do you discuss your finances with him?

    I agree with your wife, you're being far too controlling here. You either want to give your son an inheritance or you don't. If you don't then either spend it or give it to some other party. If you do it should be his to do with as he wishes. In all honesty what some people consider a 'sensible' use of money others would consider a waste.

    I'm somewhat in your sons position. I know nothing is set in stone but I could potentially inherit a lot of money in the future and I certainly wouldn't describe myself as a saver. I'm not totally stupid with money mind, I'm currently saving for a house and don't drink or gamble that much. My main vice is travelling. I'm also an only child and have no plans to have children of my own. I'd be pretty upset if it came across that my parents didn't trust me to make my own decisions and frankly I'd resent the control.

    In all honesty I'd like to think if a family member left me a sum of money in a will they'd want me to enjoy at least a portion of it, either on a holiday or buying myself something I don't really need. I'd enjoy this 'gift' from the family member and it would be a good way to remember them.

    I do agree with a number of other posters as well though. It's your money, enjoy it.
    • es5595
    • By es5595 19th May 19, 1:32 PM
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    es5595
    I'd echo what previous posters have said;
    - start spending some more yourselves, life is for living and you can't take it with you
    - a small regular donation to a local charity/charities, then you know at least some of it is going to a 'good use' if you feel he'll fritter too much
    - give his some more now (and its either got to be no-strings attached or for a specific purpose!) so you can share the enjoyment with him of spending it on the things that make him happy. If you won't enjoy seeing him spend it on holidays etc, maybe broach the subject as 'we know you'd like to own your own house, we'd like to gift you the deposit' etc.
    - trust funds etc are a huge nightmare and the people who seem to benefit the most are those doing the managing and taking a cut for doing so! Spend as much as you can in this life, and if you don't need care etc, whatever was saved for that can go to him.

    Finally, please don't worry about the casino too much, you say he works in hospitality so I assume that he's similar to shift workers and by the early hours when we get to have an 'after-work drink' the only place open is the casino bar!
    • Tigsteroonie
    • By Tigsteroonie 19th May 19, 1:38 PM
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    Tigsteroonie
    Spend on what you both want! A couple of years ago I was flying out to Australia to attend the funeral of a nephew aged 34, the son of my late brother. One of the other people on the plane said to me something along the lines of 'always fly first class otherwise your heirs will'!
    Originally posted by Gers
    If I didn't know better, I'd say you'd met my parents New expensive cars, and first class to Australia, they're busy spending it all before I get it
    Mrs Marleyboy

    MSE: many of the benefits of a helpful family, without disadvantages like having to compete for the tv remote

    Proud Parents to an Au-some son
    • getmore4less
    • By getmore4less 19th May 19, 2:06 PM
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    getmore4less
    The trick with the spending is deciding how long you will last when eating into capital

    You need to learn to spend the income first.

    It does not have to be massive spending to start with.

    If you don't like the cold somewhere warm for a month or two over the winter would be a good start.
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