If you helped DC with a house purchase, did you take steps to ring fence the money?

[Backhills]

I haven't put this in Legal because I'll take proper legal advice when the time comes, but I'm mulling over the ethical and practical consequences.

I hope to be in a position where I can give both children a substantial sum to help with their first house purchase. It's money I can afford to give, but it's very much a one off, there's no more where that came from. (There is, but it's there to subsidise my pension and pay for any care might need)

DS2 is single. DS1 has a fledgling relationship. I like her, but I have no reason to expect she'll be around forever. Even if they were talking marriage, we know lots of marriages don't last the distance.

I know when DH and I set up our first home, I'd have been horrified at the suggestion that it was anything other than "ours", whether it was me or him that put in most. This seems to be a common view on MN.

But, it's literally my life savings . I'm not keen to give it away to anyone except my sons either.

The last thing I want is for a well intended gift to cause problems in current or future relationships.

So, did you take steps to protect the money you gave from current or future partners or once it's given is it gone and you just accept that it could be part of the marital assets and potentially be split further down the line? Is it even possible when the couple are married?

I hate the idea of this one off sum being lost outside the family, but I'm also not comfortable with setting up such a unequal financial situation for my sons and their partners.

Neither are looking to buy yet (although they might if they knew such help was available) but I can see a few senarios:

• they buy alone and a partner moves in later. Marriage follows later, maybe.
• they buy jointly with an unmarried partner who has less to contribute. Maybe marry later
• they buy jointly after marriage

Would you treat those situations differently?

At this stage, I'm not asking about the legal mechanisms available, but more whether it should be protected or should just become a joint asset in any future relationships. Thinking about happiness and good relationships as much as financial protection.

Just gathering views

I think if you really mean it as a gift it should be just that. Your sons then need to ring-fence their assets as they deem fit when purchasing with / without a partner

Ok so here’s my view,
My DPs helped me and my husband get on the ladder, with a zero strings attached deposit. I haven’t worked for best part of our marriage as I’ve been home with the kids, my husband pays all the bills and mortgage, and if we did split, everything would be split 50/50, he may marginally benefit from the deposit, but I’d massively benefit from his contribution to the mortgage every month too. So my parents money is not lost. I think had it been that deposit is mine and that’s that, it can cause some resentment, especially if they only get on the housing ladder because of it, had that been the case my husband wouldn’t have bought a house full stop then neither of us would benefit! Slightly different scenario as I don’t work, but there will always be difference in earnings/contributions at some point in a relationship. That’s my opinion though.

I was on the receiving end in this scenario. There were no conditions given however I personally decided to ring fence the deposit my parents gave me. They have given subsequent cash which has gone to pay off some of the mortgage too and the understanding that DH and I have is that If get that back if we were to split. I am somewhat relying on DH not turning into an arsehole for the latter I admit.

My parents gave me and my sister money for deposits, I've not purchased a house yet as my earnings aren't enough for a mortgage yet but when I do (and my sister did the same) I will be getting a deed of trust to say X % of the deposit is mine, so that if me and DP split and sell the house I get my deposit back (it will be about 5 x more than DP's).
I would talk to your sons and suggest they take steps to do the same, my parents never mentioned doing anything of the sort but it's a no brainer to me.

As i understand from MN education, if your child ends up getting married then any assets they take into the marriage will be marital assets and so up for split. Pre-nups aren't enforeable in UK. Possible that after a short marriage with no children each would take back what they put in, so as long as your child is the only one named on the deeds and mortgage then no issue.

The complication would be if your child wanted to join forces with a partner to buy somewhere. In that situation I would expect a legal agreement to be drawn up that ringfenced each contribution. You could encourage and support that but if you're giving a gift then you can't dictate what is done with the money.

@Hppymum123 makes a good point, obviously I haven't purchased yet and I'm not married to DP but say we split 20 years down the line I would then take into account whether DP had supported me/me supported him and not necessarily take the whole deposit back.

@mynameiscalypso

I was on the receiving end in this scenario. There were no conditions given however I personally decided to ring fence the deposit my parents gave me. They have given subsequent cash which has gone to pay off some of the mortgage too and the understanding that DH and I have is that If get that back if we were to split. I am somewhat relying on DH not turning into an arsehole for the latter I admit.

You're taking a bit of a risk there - there have been plenty of cases on here where women have had money lent by their parents but it's had to be documented as a gift and then there is no way to ensure her STBXH repays his share.

I probably wouldn’t have bought a house with my partner if he was putting in a substantial deposit gifted by his parents but ring fenced from me.

It would have made the house feel like it was more his than mine and set us up for an unequal life together.

OP, I'd further add that when my parents 'gifted' me a deposit one of my parents started to try to put conditions on the type of property. It meant I felt cornered into what already felt like a scary purchase and was less inclined to be honest with her about the decisions I was making. I could have done with her advice, but didn't take it and lost a mammoth amount of money as a result.

If it's a gift then it's a gift for your DSs to do as they wish. Not sure you should even tie it to buying property at all

I think you would just have to hope you taught them enough sense not to put someone on a mortgage who they are not seriously committed to.

If they want to be surer of keeping the money they should buy alone and not put partner on the mortgage or deeds and that way they should get to keep it in any split.

If they get married and/ or have children then that seems a level of commitment where you should be wanting to put the person on the mortgage/ deeds as you are promising to share your lives and in any case they would likely be entitled to a share in the case of divorce however it was held.

If you give them the money then you really cannot dictate. If they do want to put an unmarried partner on the deeds it's a bit hard to see how you would actually stop them.

@Palavah There is no expectation of repayment from my parents - it was a gift (otherwise it would be mortgage fraud as it was declared to be a gift)

@Hppymum123 Your seeing your DH income as 'his' he earns it. You are forgetting that you are equally contributing by looking after the kids.

Op I totally get what you are saying. DH and I both had a decent chunk of equity 40k vs 50k we did have a discussion should that extra 10k be ring fenced. We opted not to for various reasons 50/50 overship being one of them but if it was a substantially different amount of money I think it should be ring fenced.

My father-in-law did this when my now dh bought a flat with his ex. He took a second charge over the property. It caused so much ill feeling and I don’t think it really helped when they split up. They weren’t married though.

Once I married dh, the second charge got ripped up. I think, morally, you have to do it at that point although I don’t really agree with it at all in principle.

My parents helped with a substantial deposit and we purchased as tenants in common - so I had a much larger ownership share than my husband. After 15 years of marriage and multiple kids though I think a court would split all assets 50/50 anyway. I wouldn’t give my own children a substantial sum to buy unless they were buying alone or buying once married with a tenant in common share reflecting my contribution. I also had a life insurance written in trust for my parents (inheritance tax free) for the sum of money they gave me. We changed that after 2 children were born into the children’s names.

I’d want it ring fenced for a period of time. All grandchildren were gifted an amount which covered part of a deposit. Gc1 had a short relationship and marriage (3years) and lost the lot. I’ve discussed with my Dcs and, whilst I can’t force them to, have strongly encouraged a percentage ownership split to cover it. Had the discussion with eldest plus her fiancé and he was fully supportive. Obviously once things move on, have kids etc then it’ll prob move to 50/50 anyway which is right. Should say though that amount was

Haven't been in exactly this situation personally but I tend to the school of thought that the more strings you attach to a gift the less it's worth having and so I think probably I would want to leave it up to your sons how they want to arrange the (future) ownership of any property (assuming they are both competent adults of course, different if there are special needs or similar).

I would advise my own children (and indeed, anyone else who asked my opinion) in the event of any joint purchase with an unmarried partner to always be tenants in common (and have a deed of trust with the ownership split reflecting their individual contributions to the purchase). In most circumstances this is the fairest thing to do and makes it slightly easier to sort out what happens with the property in the event of a relationship breakdown, compared to being joint tenants. So I suppose I sort of would be hoping they would protect/ring-fence the money I'd put in as that would best protect their own interests, but I'd like to think that I wouldn't make the gift contingent on them following my advice, frustrating as it would be if they chose not to. Buying with a married partner would make a difference to me, purely because then legally assets become shared anyway, not for any moral reason or anything, but my advice re tenants in common would become somewhat redundant. Buying as a single person then choosing to move a partner in would be entirely up to them, although again if they chose to add partner to deeds/share the mortgage advice would be as above, tenants in common if unmarried, but it would only be friendly advice as my gift would be long made by that point and you can't be forever holding it over their heads for any future choices they make.

I totally understand your concerns and it's only natural as a parent to worry about this kind of thing but I think ultimately you have to decide whether you trust your sons with a substantial gift of money at this time or not, and that includes whether they'll make sensible decisions about partners. For fairness I think you have to treat them equally (again unless they are big disparities in their circumstances or special needs involved) and I'd never want to be in the position of giving one child a large gift and then not do the same for the other because I didn't like/trust their partner, or worse didn't trust them to subsequently pick an sensible partner. I think if if it was the case that I was worried one or other (or both!) would end up in a bad financial situation later down the line due to whatever poor decisions or bad circumstances, I'd give them each a smaller gift now (if this wouldn't be enough for a house-deposit you could help them invest it in something e.g. a LISA) and keep the rest back to form an emergency bail-out fund later down the line (of course you might want to take legal/financial advice on possible later inheritance/tax issues)...

My DD and her boyfriend are buying and she is planning to ring fence her deposit which was from a legacy.

I did a deed of trust on our property purchase setting out that I got my deposit back, some was saved up over 20 years, some was gifted by family. Partner didn’t put any money in, so I wanted that protection. We share other equity on the basis of what we’re paying in. It’s a bit complicated! Marriage would change things.

@Lockdownbear not at all, every thing we have is ours, he earns what he does because I enable him to by having the kids, that’s why the deposit is ours also, as I said everything would be split 50/50 as we are a team, no inequality, as like I said there will always be points where one contributes more/less than the other within a relationship

I think if it's a gift, it should be just that - no strings attached. I'm not sure I'd be in a rush to give it to them yet though, if they're not ready to buy? I'd probably hold off until they are in that position, and then they'll probably be in a more stable relationship.

For what it's worth, my parents gave us our first deposit with no strings attached, but my dad did have a quiet word with me to explain that as we weren't married, if we split up that money would be split in half. He didn't make a big deal of it - just made sure I was aware.

I come from an Indian family and the culture is to help a son onto the property ladder when they’re still single, have that property in joint names with the parents. If it’s rented out he should save the income to build up a new deposit for a place when he marries. If it’s not then the property gets sold and he uses his share to buy whatever he wants with his wife. But it’s marriage that decides whether family money is used or not; if a relationship doesn’t progress to marriage, no matter how serious it is, family money just isn’t used. In that case family money tends to bypass the kids for the benefit of DGC.

My mum has done the same with me to buy a house. I’m currently single but should I meet someone and get married then a deed of trust will be made up to say that whatever money I put in I will get back. I will also be protecting my inheritance Aswell.

I actually know a couple who gave their DD money towards purchase of first house with her DH, but they did it by way of a second charge on the house, as they didn't want to run the risk of losing the money if DD and her DH split up. It was a wise decision, he had an affair, property sold, they got their money back and it was reinvested in a flat for DD.

You'll get a lot of legal advice from posters assuming you're in England. That's fine if you are, but if you're not you might want to say so. Even in Scotland the law on marital assets is different, and for all we know you could be in Australia!

But morally was your question, so I'll stick to that :) In your position I would draw a distinction between married and not married. A partner is one thing, and if your sons are buying a house together with a partner, that's fine, but I think you need to be clear to them verbally when you give them the money, that you expect them to take steps to ring-fence it.

But if your sons get married, they are no longer one person, they have joined with another. You have a new daughter! You really can't ask your sons to withhold anything from the person they have chosen to share everything with, and have promised to be faithful to for the rest of their lives. Now I know marriages break up, but when they get married, that should be their position. They would reasonably feel very aggrieved that you are basically saying that you think their marriage will break up, that you don't trust them to choose their wives wisely, and that you have so little respect for the person they have chosen that you would be willing to begrudge her her legal share of their house.

Personally, if my mum and dad had given me money, I would have protected it until the day I was married, and then shared it fully with my husband, along with everything else - my possessions, love, body, hopes, dreams. Money is the least of these things! If my parents had tried to give me a gift and banned me from sharing it with my husband, I would have laughed at them. The idea of not sharing anything I have with him is ridiculous.

There are definitely some grey areas though between partner and marriage (ie partner with children), and I guess just talking your concerns through with your sons will be the best way to navigate this.

we have just had a substantial amount gifted to us by MIL for a house deposit. it came from inheritance from DH Nan.
no-one has mentioned or considered ringfencing it for DH and I know he sees the house as 'ours' even though we only got a mortgage because of his earnings as he earns so much more.
I think the difference is we have been together/married for 20 years and have 3 kids together so no matter what the house as an asset will eventually go to them so there isnt the same worry, even if we split and divided assets we know it will all go to the kids anyway.