Long term strategy childrens inheritance

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David_Dublin

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Hi - I have kids that just received a 20k inheritance each. I've a meeting with a financial adviser set up next week, but was wondering if people could maybe provide suggestions, and pros and cons, for what I might consider to do with their money. I'd prefer not to go into the meeting completely without ideas. I have full authority to do with the money whatever I see fit, per the terms of the will.

I'd welcome any advice/input.

Thanks
 
Thanks for the reply.

I will fund their education. They are 8 and 11. So it really is for me to look after for them until they are 18.
 
Sounds like the money is needed in the short term. Stick it on deposit in a bank so.
 
PGF2016 said:
Sounds like the money is needed in the short term. Stick it on deposit in a bank so.
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Ouch!

I'm no expert but I'll give a go. I would ask the financial advisor his qualifications, and is he an agent or an independent advisor.

Your kids will not require all the 20,000 on one date, so which dates - and for what exactly? Why was '18' chosen?

How much risk can you, as guardian of their money to which they are entitled to at least 100% plus probably a nominal interest amount, bear?

Have you any funds to invest yourself to scale up on opportunities - larger returns for larger amounts invested etc

Thousands more questions to ask ... and better-informed posters to follow me .. .. ..
 
David_Dublin said:
Thanks for the reply.

I will fund their education. They are 8 and 11. So it really is for me to look after for them until they are 18.
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Sorry, ignore my previous suggestion. I misread your response.


Setanta12 said:
so which dates - and for what exactly? Why was '18' chosen?
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These are the questions you should be asking. When will the money be needed and for what purpose.

If it was me the primary concern would be to minimize fund fees that will eat into any gains (assuming you go the fund route).
 
You asked for suggestions, here is one.

Do you have a mortgage ? Is it at a 3% or higher rate of interest. If so YOU can get a guaranteed, tax free, return, with no fees. You cannot do better than that.
 
Just checked the details of the legacy. The kids are entitled to the money at the age of 20, not 18. I'm permitted to undertake whatever investments I deem fit, so not limited by risk or whatever. That said, I would not like to risk the principal, I'd happily go with somethong that would stay ahead of inflation, if possible.

I have my own mortgage, but I dont see how that is relevant?
 
If you're on SVR at 3%, if you use the money to overpay that then you get 3% free return. Obviously downside is this takes money from the kids!

Currently there is no product with capital safety that gives much return. Check out state savings in best buys for term deposits that are tax free. If you want zero risk, that's your best option IMO.
 
David_Dublin said:
Just checked the details of the legacy. The kids are entitled to the money at the age of 20, not 18. I'm permitted to undertake whatever investments I deem fit, so not limited by risk or whatever. That said, I would not like to risk the principal, I'd happily go with somethong that would stay ahead of inflation, if possible.

I have my own mortgage, but I dont see how that is relevant?
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Use the €40k to reduce the mortgage amount and reduce the monthly mortgage payments. Save the difference each month in an account for the kids and you will have made your mortgage interest rate as a return.

It is guaranteed, and tax free, if it is an SVR mortgage you cannot beat that.

If the term of the mortgage is the same as the time to the kids coming of age it is as simple as that. If the mortgage has longer to run you would owe the kids part of the capital, you would need to be able to provide this to them at that point.
 
Thanks for confirming what was meant. I'm on tracker so I don't think this advice applies/helps me.

The State Savings has a 10 year term at AER 1.5% tax free, no fees etc, works out at 16% over the 10 years.

Would I be mad to bet against that by going the Fund route? I suppose I will take that info to the advisor and see what he says.

Thanks all.
 
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