# Teenagers' inheritance - what to do



## Mrs Vimes (17 Feb 2021)

Hi All,

My darling teenagers are soon to inherit about €20,000 each from their uncle. They are unaware of this and that is how we would like things to stay, knowing what I would likely have done with that sort of money at their age anyway!

We have not yet recovered from the recession, and although things are (slowly) improving, we will unfortunately not be in a position to do as much for them as we had hoped when they were born. Day to day we don't struggle as such but we easily qualify for medical cards and have little in the way of savings (just to give an idea of our finances).

The eldest is hoping to go to college this year and this money should make that easier, as we won't be able to give him much of an allowance from our earnings.
The ideal (from the parental point of view) would be to give him whatever he needs (and a bit of what he wants) from this money, especially if traditional part-time jobs are still unavailable.

To be clear, I do not intend to appropriate their money, but to "force" them to spend it on the education their uncle would have wanted and if there is some left after college to make their transition to work easier all the better. My fear is partly because one of the children has had much involvement with CAMHS and (at least) one of them has ASD which I feel would make them more vulnerable to (eg) being taken advantage of by peers who they have told about the money, or, indeed, deciding to use it to live on instead of going to college in order to "get back" at us.

We will tell them at a later date who they have to thank for not starting off with a debt but if it means taking the credit in the short term then we will.

My question is: where should we put the money to be able to transfer it bit by bit to their bank accounts without them finding out what the total is? None of them have bank (or any) accounts because we never had any spare money to build up funds for them. The eldest is not yet 18, we don't want the expense of setting up trusts (but very (very) close to the solicitor handling the probate if that helps), also have a close friend in a bank if that helps (but not one I'd ask to do anything she'd have to explain to her boss).

If you've got this far... thanks 

Sybil


----------



## homer911 (18 Feb 2021)

Your solicitor may be prepared to hold the funds in their client account?


----------



## huskerdu (18 Feb 2021)

Surely the executor is legally obliged to give the inheritance to the beneficiaries, even if their parents want to control the money. 
I understand that there must be be legalities around this if they are under 18, but once they are 18, I don't see how it would be legal for the money to be withheld from them.


----------



## Bronte (18 Feb 2021)

Firstly your childen most certainly should have already bank accounts.  I started mine with them at around 12.  They need to learn responsibility around money.  In my case children's bank accounts and cards are free.  

To whom will the money be actually paid.  That's your first step.  Have you identified how much college will cost them.  I assume say a 4 year course and using 5K per annum towards that out of the 20k.  

In our circumstances we pay the fees, an allowance for food, they have to budget this themselves, and a monthly pocket money allowance. That's one amount, and to keep things simple I pay separetly to them per month, rent + utilities to try and help them demarcate the monies.    They make profit on the food allowance as I was generous there.  Which I think is a good learning skill.  Any reasonable expensive on top they have to ask for, it could be anything fom buying a book, sports gear, a university trip, (ranging from club fees right up to a ski trip - that one didn't happen yet due to covid.)  I know to the penny how much it costs annually.  

Others might know how you can tie up the 20K so it pays out a set amount monthly for the 4 years of college, and if the child goes nuts with it they know you will not be paying say pocket money.  

I know students who received their state rent/food in two moities and promptly partied the lot in two weeks leaving themselves housebound for the rest of term.  I know students who drank rather than ate their way through.  Then there are those who woked their way with jobs in restaurants and bars, and back in my time went abroad to work.    

Your children are lucky they have a sensible Mammy where money is tight and she wants to make the best for them of this small windfall.


----------



## Pinoy adventure (18 Feb 2021)

Perhaps get them too set up either a credit union account or a post office account as the first step.
I'm not sure if some banks charge fees on kids account but you want too avoid them if possible.
Then check the cost of collage.


----------



## Steven Barrett (18 Feb 2021)

Talk to the solicitor and find out where the money has to be paid. As they are minor with no bank accounts, they may be able to pay it to you as their guardian (This is a guess, I have no idea whether you can or not). If so, tell your kids that you are going to manage the money for them as they are too young to have a lump sum of cash and that their uncle envisaged using the money to pay for education. 

I wouldn't be overly concerned about it. They are still kids and will still be looking to their parents for guidance and advice, so they most likely will readily accept your decision to manage the money for them. There is no harm in letting themselves get a little treat out of the money though, new tracksuit and runners or something, just so they feel they are getting something tangible out of it rather than their education paid for, which they won't appreciate for years after. 

Steven


----------



## Deiseblue (18 Feb 2021)

It's my understanding that the monies in their entirety may be held on deposit or in Trustee Authorised Securities until the beneficiaries attain the age of 18 when such monies pass to the beneficiaries absolutely.
It is my understanding that none of the funds in question can be disbursed on the minor's behalf in the interim period until they come of age.
You should confirm the position with the Executor or any solicitor who may be acting on behalf of the Executor.


----------



## cremeegg (18 Feb 2021)

Just give them the money when they turn 18.

Its their money and more to the point it is their responsibility.

The good or foolish use they will make of it will be a) their doing, b) your opinion as to being good or foolish.


----------



## Bilbo1 (18 Feb 2021)

cremeegg said:


> Just give them the money when they turn 18.
> 
> Its their money and more to the point it is their responsibility.
> 
> The good or foolish use they will make of it will be a) their doing, b) your opinion as to being good or foolish.


At the same time, it is unfair on the rest of the family if one of them blows it and then asks for money for college, while the other co-pays for it.
If I'm expected to pay for their college, then my opinion surely counts.

If you give it to them at 18, you could lay out the terms that you will only cover the education costs each year to a certain limit, and expect the rest to be paid by them (which they can do with the inheritance). 
If they blow it, then they will be forced to make some money themselves, if they want to continue the education.

You give them the means to focus on their studies if they are responsible with the money. If they are not, they can learn from the consequences.


----------



## misemoi (18 Feb 2021)

Is there any way that that they can survive without this money at all?  I know in college despite getting very little in monetary terms from parents (they gave all they could!) I was able to work part time, balance it with my studies and manage the grant I received to make it last.  I also worked summers and basically lived off what I could earn - it was a great learning experience!  I do know plenty of people who did the opposite though.   It is a large windfall and it would be the basis for a very good start on a deposit (potentially a 10% deposit on an apartment for example), if they are able to get by without it.  I do understand it is very different times now in terms of part time income, but also there are lower costs eg travel.  I would expect when college is back to in person that part time jobs would be more plentiful?  I would not let such a large sum be in the control of an 18 yo unless I was confident that they all would take care of it very carefully.


----------



## Thirsty (18 Feb 2021)

cremeegg said:


> Just give them the money when they turn 18.
> 
> Its their money and more to the point it is their responsibility.
> 
> The good or foolish use they will make of it will be a) their doing, b) your opinion as to being good or foolish.


I held the same opinion at the time & did exactly that.

To this day I regret it.

To my mind you have two options:

a) Lock it away & give them the full lump sum when they each turn 25; and let them do as they wish.

b) give them the money now and let them do as they wish.

I would, personally, not dictate how the money is spent; no matter how good the cause.


----------



## Mrs Vimes (18 Feb 2021)

Thanks for all the responses. Unfortunately we are unlikely to be able to give them more than busfare for college and a little pocketmoney, they will mostly have to rely on the grant.

We are unlikely to be in a position to help them with a deposit for a house, or pay towards weddings or any of the other things we would have envisaged doing for them when they were born - a combination of recession and illnesses has turned our lives in unexpected ways.

The fear is that they blow the money with nothing to show for it and end up severely limited in college choices, or looking at the price of houses when they get to that stage and blame us for not doing more to protect what could be the only lump sum they ever get. I will likely never get a lump sum, but my parents were in a position to pay entirely for college, and have always said that if we were in trouble financially I was to call them immediately and they would help out.

Does anyone know at what age a parent cannot open a bank or post office or credit union account for a child? I know that babies can have bank accounts and obviously know nothing about them.


----------



## huskerdu (18 Feb 2021)

I know you want to do this because you want the best for your children but I still don’t understand how you are going to be able to keep this from them legally . 

Are you the executor of the will ? 

If you are not , are you expecting the executor to give it to you and not the beneficiaries, 

You can’t open a bank account in your teenagers name under money laundering laws


----------



## Black Sheep (18 Feb 2021)

I opened bank accounts online for my grandchildren 3 years ago. They are in secondary school and the hope is that this cash will help them in third level or whatever is needed at that stage. They are still unaware of these accounts and all bank statements etc come to my address.
Hopefully they will nave a nice surprise one day.

Perhaps this would be a suggestion for the inheritance.


----------



## Gordon Gekko (18 Feb 2021)

There’s an easy enough way to deal with this. Just tell them that their uncle has left them money to cover college, open bank accounts for them, have the money sent to those accounts and then get the kids to transfer it to you.


----------



## Steven Barrett (19 Feb 2021)

cremeegg said:


> Just give them the money when they turn 18.
> 
> Its their money and more to the point it is their responsibility.
> 
> The good or foolish use they will make of it will be a) their doing, b) your opinion as to being good or foolish.


This is the worst thing you could do. When I was in college, my parents were able to set up a covenant and get tax back on my college fees. Part of the process meant have £5,000 in my bank account for a number of months. Several hundred of that £5,000 was spent, knowing I would be working over the Christmas and could pay it back. There were plenty of stories of others who blew the whole £5,000. Giving a child starting out on the new adventure, and social life, of college €20,000 and telling them to do what you want with it is irresponsible, especially ones who have their own difficulties. 

While 18 is the legal age of an adult, they are still kids and still rely on their parents for so much in life. Having them help them with things like money is one of them. Giving them €20,000 to start off is like giving them a Ferrari and telling them to drive responsibly. 

On the bank account, you can open a bank account for them up to age 18. They need to be with you and you have to have their passport. AIB need you to sign a letter saying that they live with you as address verification. All the information you need is on each banks websites.


----------



## dereko1969 (19 Feb 2021)

Just in relation to the grants situation - if the money is "resting in your accounts" would that impact eligibility for the grants?


----------



## shweeney (19 Feb 2021)

SBarrett said:


> This is the worst thing you could do. When I was in college, my parents were able to set up a covenant and get tax back on my college fees. Part of the process meant have £5,000 in my bank account for a number of months. Several hundred of that £5,000 was spent, knowing I would be working over the Christmas and could pay it back. There were plenty of stories of others who blew the whole £5,000. Giving a child starting out on the new adventure, and social life, of college €20,000 and telling them to do what you want with it is irresponsible, especially ones who have their own difficulties.



my folks did the same, and sure enough I'd usually have it burnt through by Xmas each year and have to tap them up for more cash

is that covenant option still available? and how does it work? I have kids going to college myself in the next couple of years, if there's any way of subsidising them in a tax-efficient manner that would be useful (I know the "admin fees" are not deductible)... They won't be eligible for a grant.


----------



## Steven Barrett (19 Feb 2021)

shweeney said:


> my folks did the same, and sure enough I'd usually have it burnt through by Xmas each year and have to tap them up for more cash
> 
> is that covenant option still available? and how does it work? I have kids going to college myself in the next couple of years, if there's any way of subsidising them in a tax-efficient manner that would be useful (I know the "admin fees" are not deductible)... They won't be eligible for a grant.


No, its gone when the "free" college fees came in


----------



## Mrs Vimes (25 Feb 2021)

Hi All,

Sorry, I haven't been back in a week - stuff came up! Many thanks for your replies.

To clarify, I am not the executor (it wasn't my uncle whose estate it was, it was my husband's, he isn't either). The solicitor agrees that the kids shouldn't know about the money at this stage because he knows what they are likely to do with it and it could cause long-term damage. He is happy to follow my suggestions about where to send the money as long as it is allowed by his professional guidelines.

I just heard from the solicitor today that the will actually says the money is to be paid to the parents in trust until the children reach the age of majority. This gives us a few months until to sort something out the eldest hits 18. We are now thinking to put the money in investments with rolling maturity dates so that they make some return and also the money is accessed slowly. Even if we end up telling them about it (or they find out from other family members) then they still won't be able to access it any more quickly.

@Black Sheep which bank did you use, that is what I would like to do ideally?

@Gordon Gekko I can have the money transferred to me instead of them, that's not the problem (Also, they don't have passports).

@dereko1969 If I wasn't the beneficial owner of the money I would be declaring it as theirs, also I haven't checked the eligibility criteria yet but I don't think we'd be too close to the line even with it counted.

@SBarrett They are still kids but with the difficulties they have been through I think they are more likely than the average obstreperous teenager to blow it all to spite their know-nothing parents. We would certainly spend some of my husband's portion on a treat - we had thought maybe a holiday, but that won't be this year now!

Thanks all,
Sybil


----------

