My son will use up the inheritance from grandad – can I repay his college charges with it as a substitute?

I’m currently dealing with my late father’s estate. He left 90 per cent to me, and the remainder to my two sons.

One of them is estranged from us. We saw him at the funeral but he was extremely drunk and upset. He is taking a year out from medical school due to financial problems and is working to save up for the next year.

I’m concerned he is drinking heavily (one of the reasons we asked him to leave the family home) and he will fritter away the money left to him.

Can I pay it off his university fees or accommodation directly? P.W, via email

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Harvey Dorset, of This is Money, replies: I’m sorry to hear about your father, as well as the problems with your son.

Regardless of your current relationship, it is good to hear you want to make sure money left to him is well spent and benefits him, whether he sees that in the short term or not.

This is especially the case given the current issues you say he is experiencing with alcohol, and your worries he will waste the money passed on to him by your father.

Unfortunately, as is discussed below, your hands are largely tied regarding what your son inherits and what he decides to do with the money.

In some ways your issue is not a financial one, but an emotional one. In order for you to make sure that your son benefits from the money left to him, it may be important to address your relationship with him. 

Indeed, for him to see that it might be best for the money to be directed towards his student loan, he needs to understand that you want what is best for him.

We spoke to two financial advisers to find out what you can do to ensure your son spends his inheritance from your father in a sensible way, and what you should consider when planning your own will.

Jonathan Halberda, specialist financial adviser at Wesleyan Financial Services, replies: Firstly, my condolences on the loss of your father and I am sorry to hear about your situation.

Dealing with an inheritance can be an upsetting experience and especially so when there are complicated family relationships involved.

In this case, you may have some legal options to manage the inheritance intended for your son, if you’re concerned about his wellbeing and how he might use the money.

Here are four key points to consider:

1. Your role as executor

If you are the executor of your late father’s estate, then you are legally obliged to distribute the assets as per his wishes, as laid out in his will. 

This generally means that you must follow the specified instructions and directly provide your son with his share unless there are stipulations in the will allowing for an alternative arrangement.

2. Consider a deed of variation

You can, however, consider a deed of variation. This allows beneficiaries to modify how their inheritance is managed or distributed. 

Simply, it is a legal document that allows you to change your father’s will, but it’s important to stress that this cannot be done unilaterally – you must also have the agreement of your son. 

If your son agrees, you could work together on a deed of variation that redirects his inheritance towards his university fees or accommodation.

3. Trust arrangement

If the will allows for it, or if a deed of variation is signed, it may be possible to set up a trust to manage your son’s inheritance. 

This could specify that the funds held in trust are used exclusively for his educational expenses, living costs, or other specific needs. 

This trust can limit his access to the funds and be structured to safeguard against potential misuse.

4. Legal advice

In situations like this, it’s highly recommended to consult a solicitor with experience in wills and trusts, as they can help set up any legally sound arrangements to meet your objectives. 

Additionally, if you’re concerned about potential disputes, legal guidance can help protect the estate’s interests and ensure compliance with UK inheritance laws.

It’s worth noting that, without specific permissions in the will or an agreement like a deed of variation, any alternative use of your son’s share of the estate could risk non-compliance with your executor duties. 

This only holds the potential for further challenging situations.

Paul Crossan, senior financial planner at Hargreaves Lansdown, replies: A Will is essential for later life planning as it provides certainty and those who you wish to benefit from your estate do so at the right time. 

As your estranged son is over 18 there is no option but for him to inherit his share, which was your father’s intention.

Sometimes wills can be varied post death, by using a deed of variation. All beneficiaries have to agree to the change and in this instance its unlikely your son is going to agree to be removed from the will.

You have the option to pay your son’s university fees and/or accommodation costs directly from your own money. 

You should also consider your other son and whether to make a gift of equal value to them. If they don’t need the money, they could pay down their mortgage, save or invest for their own future.

It also opens a longer-term question; if the behaviour of your son persists and he continues to be reckless with money and lifestyle then you may feel uneasy about him eventually inheriting from your own estate.

Real world scenarios such as addiction or emotional issues like this are not uncommon and this is where a trust could be an option. 

A trust would hold inheritance or gifted money for the benefit of your son, but would be controlled by trustees nominated by you. 

You could also provide guidance to the trustees on when and how to make payments to your son. 

For example, only pay income, or only pay out capital in specific circumstances such as buying a property.

There would be numerous factors to consider whether a trust may or may not be appropriate. A financial adviser or solicitor would be able to discuss these options. trusts can be set up during your lifetime, or on your death through your will.

There may also be inheritance tax benefits for the person setting up the trust (the settlor) which is a common reason for people considering such trusts. 

Putting money into a trust could mean that your estate saves inheritance tax on the full amount once you have survived a further seven years. 

Any investment growth above the initial amount may also be immediately sheltered from inheritance tax which would have been payable from the parent’s estate.

This is a complex area and there is no one size fits all when it comes to inheritance tax planning and so a detailed assessment and understanding of individual situations by an appropriately qualified and experienced financial adviser or solicitor would need to be undertaken first to discuss all options.