There is something wrong with me: you give the fella the money when he is released from prison. It is after all his, and he will need it when he is released.
The legal position is clear - you are holding the money in trust...
The fact you cant place the money at present doesnt change the legal position.
You should also keep a clear note somewhere
so that if yo should get run over ( no not by relatives of the fella) by accident then your heirs know that £ x, 000 is not yours but someone elses.
People change - if the mother gets short of money she may well swallow her scruples and take the money on behalf of her children.
You should keep records so that if in the future you do find your fingernails being ripped out, you can say - Oh yes I do remember what I did with it.....