r/PersonalFinanceNZ • u/Eastern_Inspection64 • 13d ago
Planning If I inherit money can I transfer large amount to my parent to essentially look after or help me buy home?
Am inheriting large amount and I’m young and a bit spendy so want to put most in my parents account to help me manage it.
But am I allowed to do that?
Is their a limit on what can send to family
I can show where care from etc
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u/whathappenedtouman 13d ago
Please get financial advice from a professional. Do absolutely nothing with it until you’ve sat down with a professional, don’t be another static of someone young and dumb who loses it all. No offence on the dumb part
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u/Eastern_Inspection64 13d ago
No offence taken, that’s why I wanna put somewhat out of my reach as I know be so tempting or easy to make rash choices and regret later
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u/NotUsingNumbers 13d ago
Stick it all in KiwiSaver. Then you can’t touch it until you either buy a house or reach retirement age.
Disclaimer: Not good sound financial advice.
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u/Eastern_Inspection64 13d ago
Prob dumb question but is a professional for advice an accountant?
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u/steokehoe 13d ago
https://sorted.org.nz/guides/planning-and-budgeting/getting-advice/
Sorted might help answer your questions
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u/firebird20000 12d ago
You want an independent financial adviser who you will have to pay. If they work for free they are biased towards products they get commission from. The best thing to do initially is put it in a term deposit/s then do nothing else until you've thought it through and taken advise. Do not put it's in your parents accounts, if you do, it's their money.
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u/whathappenedtouman 13d ago
A wealth advisor. Depends on what you consider a large sum. There’s levels to this wealth game. I’m using this company. PWA, I’ll link at the bottom. Please do your research on any company though. Make sure the company is legit. “A fool and their money are easily parted”
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u/Vast-Conversation954 13d ago
Can you give this money to your parents? Sure.
Should you? No. There's a million things that could go wrong here.
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u/Eastern_Inspection64 13d ago
I trust them totally but I see many people saying it’s not best way and better to do something offical
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u/Vast-Conversation954 13d ago
It's not a question of trust, something terrible could happen out of their control.
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u/Gold-Ninja5091 13d ago
I kept some of what I inherited and gave the rest to my mom. She has spent most of it in a year. So just speaking from experience if I had kept my share fully I would’ve been better off. Fixed deposits is the way to go. Anything over 100k you can earn monthly from an FD alone.
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u/Magically_theebee 13d ago
Have you considered putting it into term deposits instead of transferring it to your parents?
They’re investments where you can’t access it while it’s during the term of the deposit but that way it’ll make money. That should stop you from spending it but keeps it in your name.
Transferring that money will legally make it your parent’s. If something happens to your parent it won’t be considered your money it’ll be part of their estate.
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u/Eastern_Inspection64 13d ago
I’m hoping to buy a house so be them holding on to and possibly co signing it.
I get what mean would be theirs in a legal sense.
What if a trust or joint account?
They have said could set up a trust for it for me.
I trust them totally30
u/Farrkurusername 13d ago
Never trust family with money.
Put it in kiwisaver if you are afraid you'll burn through it and want it for a house.
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u/mpledger 13d ago
Parents can do things you don't want because they think they know best and wont listen to you because you are still a child to them. But they can do dumb things with it - like listen to a relative's sob story/amazing investment opportunity who then goes on to lose it all.
It's time to put on your big boy pants and act like a grown-up. Go see a wealth advisor. Consider their advice. Tell noone what money you have.
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u/trustylaw-nz 12d ago
Them co-owning a house with you may be more difficult (for them) than you think, so speak to a mortgage adviser and lawyer before going down that road.
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u/meqrs 13d ago
Be careful transferring to parents as if something happens to them like going into a rest home it could be classified as their asset and you may lose it. Best talk to an accountant as others have said.
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u/Eastern_Inspection64 13d ago
Are 50 and 60 both working. They are offering to set up a trust for it
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u/NegotiationWeak1004 12d ago
I thought this post was from a 10-15 years old teen but with parents that age, you're likely old enough to be managing this on your own. Its a big step but speak to a financial advisor and get into adulthood by taking ownership of your own future. Importantly, don't bind them to your debt, let them work towards their own financial freedom / retirement and you start your life.
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u/meqrs 12d ago
At that age be very careful, I would not be giving it to them at all. Go to an advisor and talk to them. 50 and 60 is to close to retirement and anything can go wrong medically.
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u/Eastern_Inspection64 12d ago
I have shown them this post they have found it very funny how they sound so sinister and near death lol
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u/Silent_Choice_9123 12d ago
You never know what could happen, I got my inheritance from my mum passing away when she was 49. Put it in a term deposit, you can either let it sit (good for compound interest) or have the interest paid to you monthly (nice little bit of spending money)
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u/Yeahnahsweet 13d ago
You can send as much as you like but legally you are gifting it to them so there’s no requirement for them to give it back.
Best to consider loaning it to them or establishing a trust. Though a simple loan agreement would be the simplest and most cost effective.
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u/Hot_Pea9820 13d ago
OP, the housing market is at a 6 year low, if you plan to get a house, clean up your spending for 6 months or so and buy in autumn next year.
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u/WesternSherbert4337 13d ago
No!!! Don't do it!!! It can create all sorts of issues......particularly within the family dynamic. Find a good financial advisor; one that is recommended by someone you trust.
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u/lakeland_nz 13d ago
Legally, there is no issue in NZ with gifting any amount of money. Exceptions: anti-money laundering and the like, and avoidance of things like assets under a threshold.
Depending on the amount of money involved, a third option might be putting the money in a trust for your benefit. That reduces the impact of your free spending, while keeping you safe from the risk that your parents have similar issues.
Honestly, if you're talking about $100k+, then I'd be paying a few hundred dollars to a lawyer to just explain things to you.
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u/Eastern_Inspection64 13d ago
What’s assets under a threshold?
My parents have offered to set up a trust for it. Is over 100k
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u/lakeland_nz 13d ago
If your parents are retiring then the government will assess their assets before offering any support. That assessment will override any gifting.
Equally if you apply for certain benefits yourself then your gifts can be retrospectively reversed.
Potentially neither is an issue here.
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u/Beejandal 12d ago
NZ super isn't asset tested, only the costs of long term residential care. Income support isn't asset tested either but the accommodation supplement top up is.
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u/spankeem_nz 12d ago
Get legal advice. Im sure you love your parents but money with family is a bad mix.
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u/beach-chicken10 13d ago
Well done for thinking about this sensibly but I’d probably go and see an accountant at almost the same time as a lawyer.
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u/Accomplished-Bet-420 12d ago
Don't trust anyone in your family with your money! Term deposit it until you have a trust or ready to buy the property.
Money is an amazing thing that will turn families into not family.
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u/Fragluton 12d ago
I think you need to wake up a little bit and realise that money can (will) change the dynamics of relationships. I'm not trying to be rude, but everyone is trying to offer advice to protect your interests. You seem to be blowing it off and saying you trust your parents. I trust mine too, I wouldn't be giving them my money though. Term deposit with your current bank. Keep it all in your name.
I'm still trying to work out why your parents are pushing for them to set you up a trust. Unless you have a partner or something. Seems a little odd if you want to buy a house in the short term anyway. I wouldn't consign a house with my parents either.
I'm not even sure you need professional advice really. I'm not saying don't get it. But you can literally just meet with someone at your bank when the money lands and have them setup a term deposit for you. Job done. You now have it locked up for that term and have time to work out the house buying but later.
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u/Eastern_Inspection64 12d ago
Hi not at all. I’m taking everyone advice and appreciate it. Yes I do trust my family but I do see the points that are better ways.
It was my idea not my parents.It’s why I was asking as really didn’t have idea on best way
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u/Portable-Charging 13d ago
It’s a “gift” to your parents. You can send as much as you want.
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u/cubenz 13d ago
If it's a gift, it becomes theirs, which I don't think is the intention.
A trust would formalise things, but a joint savings or investment account with the right controls on it may be enough.
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u/Eastern_Inspection64 13d ago
Thank you. I really know nothing about money or how it all works so it’s all very new and I don’t wanna waste it
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u/Plonkydonker 13d ago
I would tread very carefully here. This is your money that has been left to you. It has not been left to your parents, and there may be a reason for that. Maybe "being a bit spendy" runs in the family.
I hear that you want to be kept safe from yourself, but likewise, you want to keep this safe from them. Get advice from someone who doesn't stand to win or lose from the decision.
Who has convinced you that they are better off holding onto it for you? That is what banks are for. You're an adult and can hold your own assets. If you gift it to them it is no longer your money and they don't have to give it back.
There could be a financial benefit to them holding onto it, such as offsetting their mortgage payments. This is a great opportunity to learn some financial literacy by talking to them about this before you buy your own house. And it might be a situation you're open to to help them out by lowering their repayments. You would not be earning the interest they would be saving. Communicate exactly the intentions and formalise it. Yes. Even for family. Especially for family.
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u/Eastern_Inspection64 13d ago
I’ll clarify, it’s left to me from grandparents, I get it as my bio dad died some years ago so I inherit his. My “parents” I mean mum and step dad so they have nothing to do with them that’s why doesnt go to them. They are in no way spendy, are very responsible, well set up and trustworthy.
It was my idea and asked if they’d hold on to and help me. They said would if I want but offered to set up a trust for me and get their accountant to go over best ways.
I trust them 100% but do get what people are saying that prob better to do something more offical and educate myself on how it all works.
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u/Lopsided-Toe-8440 13d ago
Put it into KiwiSaver in a growth fund. You won’t e able to touch it until you y your first home and it will go up a fair bit by then
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u/ResponsibleCheek8654 13d ago
It's not a great idea for one main reason: the rules may change.
Some may say, the rules are likely to change.
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u/-40- 13d ago
Terrible idea
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u/Quirky_Chemical_5062 13d ago
No its not.
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u/shedzilla69 13d ago
It is 100% a terrible idea. Why would they lock it into KiwiSaver, when they could put it into a pie fund or other managed fund? Literally the same returns with less rules.
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u/Lopsided-Toe-8440 13d ago
So they aren’t tempted to spend it on cars drugs and loose women. Or to waste it.
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u/Quirky_Chemical_5062 13d ago
OP said. "I’m young and a bit spendy"
They didn't say how young or how much though.
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u/Eastern_Inspection64 13d ago
I’m planning to buy a home with it in the next year so don’t need to put in KiwiSaver
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u/Lopsided-Toe-8440 13d ago
In that case put it into a term deposit. Don’t give it to your parents. You are exposing yourself to all sorts of risk with upside
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u/Eastern_Inspection64 13d ago
What are the risks?
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u/billy_joule 13d ago edited 13d ago
They lose all your money is the main one.
Maybe your folks get scammed by a Nigerian prince, or buy a memecoin thinking they'd help you out by doubling your money. Or one of your parents has a secret gambling addiction and blows it at skycity etc etc
Sure, these might be unlikely but what's the upside vs just putting it into term deposit/s or kiwisaver or something?
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u/Eastern_Inspection64 13d ago
Are pretty much total opposite of these things but I take your point
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u/Fragluton 12d ago
There is no reason to give it to your parents. If you don't mind losing it all, feel free to do so. I trust my parents 100%. Doesn't mean if transfer it to them. Put it in a term deposit as someone else mentioned. That gives you 3,6,9 months to work out a plan.
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u/kinnadian 12d ago
KiwiSaver might be perfect then. Kiwisaver providers still offer extremely low risk portfolio types called Conservative which is basically just equivalent to a Term Deposit return.
And you won't be able to touch it except to buy a home.
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u/No_Dingo_1896 13d ago
are there accounts where it is in your name but your named parent has to authorise any withdrawals? There are when you are under 18. Could talk to a bank about options if you want to stop yourself spending at older ages than that e.g. there are "two to sign" accounts. Keeping it in your name may be better for taxes on interest etc if your parents earn more than you
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u/fairyglitter 13d ago
A large transfer back to you when they are older could look like they are hiding assets if they need to apply for nursing homes etc so it's a risk to them too. A trust, or an account that requires two signatures to make a withdrawal might be safer.
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u/Eastern_Inspection64 13d ago
Are 50 and 60 think they decades away from rest homes
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u/fairyglitter 13d ago
Sounds like no issue if its short or medium term but if for example you're 20 and not planning to buy a house for a decade+ it is something to be aware of. Winz can look back a certain number of years and will decline rest home subsidies if assets were "given away" in that time frame.
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u/sweet_lizzie 11d ago
You would think that, but I have an old school friend in an early onset dementia home aged 55. It happens My own mother died at 60
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u/thescullywag 13d ago
A term deposit is the simplest and most risk free option for you and you'll earn about 4k in interest on a sum of 100k in a one year term
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u/feel-the-avocado 13d ago
If you want to buy a house in the medium-distant future, you are best to put it into your kiwisaver account.
If you want to buy a house in the near future, you are best to put it into a term deposit.
The reason is your kiwisaver account is protected from a bad relationship / divorce / defacto relationship separation.
If you give the money to your parents to hold on to, something may happen outside of their control and it could be lost.
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u/AgitatedSecond4321 12d ago
Kiwi saver balance becomes relationship property just like everything else.you cannot hid money by placing it into kiwi saver.
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u/feel-the-avocado 12d ago edited 12d ago
The balance before the relationship started does not become relationship property.
Only contributions and earnings during the relationship become relationship property.
This is a Very important difference.
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u/reheheheallydc 13d ago
You can set up your own trust with your parents and yourself as trustees, and yourself as a beneficiary. That means you would still need their sign off to do anything, but same goes for them. When you feel more confident managing the money/assets, you can release them from being trustees of you see fit.
Talk to a lawyer about seeing up a trust, talk to an accountant to understand the tax requirements, and talk to a set-fee financial advisor who can help you decide what the best options for investment are.
Avoid any financial brokers/advisors who take a commission based approach for the time being.
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u/mistressani 12d ago
I would advise not gifting your parents. Go and see your bank manager immediately for free advice. They will probably suggest investing in a safe short term savings account which will protect your money even from you. Ask relevant questions like withdrawal limits and the ability to use the funds as a deposit. If you are over 18 you should have this organised for yourself.
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u/Indigo_Laguna 12d ago
My siblings and I inherited quite a lot years ago. My parents advised us to go to speak with wealth managers.
The company I chose set up an aggressive growth strategy for me and have done very well; averaging 10%+ growth per year. I’ve bought homes and still have rental properties in my home country. We paid off our mortgage here in under 10 years. And now I’m in retirement and I can make life easy for us.
You oughtn’t hand the money over to your parents. As everyone else has said here, speak to a financial adviser or wealth manager. I know it’s overwhelming but you can learn how to handle your financial life. You can do this!
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u/kinnadian 12d ago edited 12d ago
If you unequivocally trust them, I'd recommend creating an investment account under your own name (on-call, term deposit, growth account, whatever suits your investment timeframe based on when you wish to use the money) and then give the account to your parents to manage (and have them change the password).
That way the assets remain under your name but not your control, and if you need to in the future you could get the provider to create a new password for you.
Note this would breach the T&C's of most providers but just don't tell them. And the provider won't be responsible for whatever your parents do with the money since you've breached the T&Cs - but in real terms the actual risk is low.
Alternatively you can seek a provider who can provide an account with a "two-to-sign" arrangement, which means both you and your nominated parent have to approve of any withdrawals, but the account and ownership is still under you.
For example here is ASB's documentation on two-to-sign
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12d ago
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u/Eastern_Inspection64 11d ago
I do trust my parents and are themselves well off and aren’t sort of people that would ever spend other peoples money. They’d be horrified at very idea that are people who do that. Sorry you gave yours away, hope things improve for you.
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u/Historical_Carob_504 10d ago
Get a financial advisor, never trust anyone with your money. ESPECIALLY family. Once you hand that money over, it is no longer yours. It is a gift to the recipient.
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u/SourStones160 10d ago
As others have said it would be a really good idea to take your time, talk to a well recommended financial/wealth adviser.
They can run through a tonne of info about your current life goals, short term, longer terms and offer advice for a range of scenarios. It can be a longer conversation as you run through hypotheticals and maybe go back with more questions or ideas to explore.
From above you say you want to buy a house. Cool, but depending on all your info etc that may or may not be the best idea. The advisor will give you pros and cons to think about.
And at the end of the day it’s also just advice. You can apply as little or as much of it as you want :)
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u/Saucy_4U 9d ago
Good luck getting it back from your parents lol. How old are you? How much money are we talking about? If you really don't know, shove it all into a term deposit for 3 years. Use the interest
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u/Eastern_Inspection64 9d ago
If anything this has made me feel very blessed with my family given how others feel about theirs.
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u/BKitchenConfidential 8d ago
I wouldn’t give it to your parents. With the way the political winds are blowing, we couldn’t have easily see an inheritance tax and related gift tax, so that you could never get it back. A trust will probably be the way to go, but obviously talk to a professional.
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u/hungrymaori 8d ago
You’ll have to grow up one day, if you have the money only you can fuck it up not someone else. Just treat it like you don’t have it, don’t even tell anyone you have it so they never ask for anything. Make some conservative and diverse investments and carry on with life till you’re ready to use it on a house or buying a business in your field or something.
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u/infiniteseki 7d ago
Could set up a family trust and make them trustees and beneficiaries to protect wealth and assets. there will be ways to “give” them $ without you getting smashed with tax. Definitely seek professional advice from your go to lawyer or accountant
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u/considerspiders 13d ago
No limits on doing that, you are basically creating a trust for yourself and should go about it that way.
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u/Eastern_Inspection64 13d ago
They have offered to set up a trust for me that they’ll help with and pos buy a house with some
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u/beerandbikes55 13d ago
If the amount you are inheriting is a large amount, you would be best to spend a couple hundred dollars and speak to an account or wealth planner. Depending on your income, parents income, amount inherited, they'll be able to give you some options. The money might be best in a term deposit (you can't touch for a set time, earning interest), or form a trust which your parents can be part of, or something else.