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 find these parents putting 2nd charges on properties very controlling. I would never agree to a gift with as many strings as that and would think it very demeaning and refuse to enter into such an arrangement if I was the DH or DW of that person.

If your grown up adult child marries someone, whether you like that person or not, then you really really need to take a lot of steps back from that relationship and not interfere or try to control in any way finances or otherwise as then you are making it more likely that the outcome you fear (divorce) will happen.

I recently inherited some money, I put down a 30% deposit, increased my mortgage and bought a flat for my DC to live in. He pays me rent which covers the mortgage. Eventually I’ll work out a way of either signing it over to him or he buys it off me, I’m not sure yet what the plan is but for now he’s in a property he could never have afforded to rent or buy, has security and I can’t lose the money that my relative worked all their life for.

A relative sold a London flat to a daughter and boyfriend at the price paid several years earlier, ie a huge discount. His parents’ contribution was roughly 10:90. Three months after they took on the mortgage they split up and he claimed half, which amounted to a six-figure sum. Legally right, morally wrong. Not only that, the relative had to pay CGT on the paper profit!
Any money I give my children will be ring-fenced.

Not exactly the same situation but DHs parents wanted to give DH some money for a deposit when we were looking at buying a house together. They gifted him 37% of the deposit for our joint house and the other 63% came from the sale of my house. We have these amounts 'ringfenced' if we ever spilt.
Obviously we plan to be together forever, but we are both aware that its not always the case and want things clear cut.

Friends put a second charge on a house they bought with their daughter. She went onto get married they wanted a bigger house, his mum was a solicitors clark who had a fit when she found out, her son was using the same solicitors. It caused a hooha which I thought odd when the house was bought long before her son came along.

We gave son money for first house mortgage company advisor insisted we sign away any rights

My parents gave my younger single parent sister some money as she wanted to buy a house. We realised if anything happened to my sister the money would go to her daughter (fine) but her ex who already owned my parents money he never paid would be in charge of it as she was a toddler at the time! So my sister wrote in her will what needed to happen to the money.
I went on a trust fund seminar and I believe via trust funds you can refence money for your children specifically for property if you want which I believe can't be touched by partners if you specify this in the trust set up. Worth looking into.

From the other side...

My husband I bought our house with a substantial gift from my in-laws.
If there was a question of it being his and not ours we would not have bought this house.

Or rather dh could have bought it and I would save whatever I would have been laying into the mortgage and put it in a personal account.

I gave up my career so we could have children and start a new business. My sacrifices might not have a £ sign attached but they definitely have value. I don't see why I should end up worse off in the long run. Luckily dh agrees as did his parents.

(Who now live with us so good job too 😆)

We have this as a deed of trust or whatever it’s called. Only really valid for non married couples I assume .

@EmmaJR1

From the other side...

My husband I bought our house with a substantial gift from my in-laws.
If there was a question of it being his and not ours we would not have bought this house.

Or rather dh could have bought it and I would save whatever I would have been laying into the mortgage and put it in a personal account.

I gave up my career so we could have children and start a new business. My sacrifices might not have a £ sign attached but they definitely have value. I don't see why I should end up worse off in the long run. Luckily dh agrees as did his parents.

(Who now live with us so good job too 😆)

You are married. Even if the money was in trust you could be entitled to some of it. The OP has children who aren’t married & maybe she doesn’t want him to lose her money with every new relationship. I have actually seen situations where the DP has run off with the money as soon as it’s in the joint account. Not everyone is honest unfortunately and many wait until the money is in the account before splitting up.

I think if you are giving a gift of that size, you have to trust your dc will make good decisions with it. Realistically, if they are in very new relationships, they shouldn’t be buying a house together anyway. And if they aren’t married there should be some arrange where they both protect the money they put in.

In a marriage with a long term trusted partner, I think that’s different, because legitimately it is a marital asset. The partner may be contributing just as much or more or could be paying more of the mortgage. But that’s ultimately for them to work out.

My mum gave me money to put towards a deposit. I would have told her where to go with it if she’d started on protecting my assets. I’m a 40 year old professional woman who can make sensible decisions on her own. I think it you want to give it, you can offer advice (especially if your children are young and have no idea about these things) or better yet, support them to get legal advice. But it has to come with no strings attached.

I think giving a gift with strings attached is not a gift at all. If you truly want to help your sons by gifting them a sum of money then that should be the end of it, you shouldn’t dictate how they use it/protect it. For all you know they could want to spend it travelling the world and gaining all the valuable experiences that gives you. You should have trust that you raised your sons well enough to pick good partners and life choices that you don’t need to dictate how they use things.

Imagine if you were the girlfriend in that situation, who hasn’t come from a privileged background in which her parents can gift her a house deposit but yet whose new mother in law thinks she’s a gold digger. At the end of the day would you rather your sons have a big house but nobody to live with and lonely or a house with someone they love and care about.

Just ring fence it - if it causes problems then so be it - I would say they were latent anyway so probably best the ring fence in place. But it would be ring fenced to your Son and he would still have a choice to ring fence or not anyway - he would be entitled to in the divorce or whatever but may choose not to if say children were involved and it was about providing a roof for them etc.

I've thought about this too OP. I was in a different situation as my dad gave me the money for the deposit and I later sold that flat to buy a first house with DH - we were married by then.

If DS wanted to buy a house with someone else - either a friend or a partner - straight off - I would want the deposit money ring-fenced so if they split up/sold the property, he could get the deposit back and start again. But a lot depends on other contributions - if his partner earned more than he did and paid more towards the mortgage, then you'd hope they'd be sensible enough to hold the property as tenants in common in fair shares according to their contribution - both deposit and mortgage repayments.

Once there are children it's a bit different as you wouldn't want your grandchildren being made homeless and if one parent is looking after the kids then it is a very different issue.

But first purchase with no kids, yes I'd want it ringfenced. You can always change things if kids arrive.

Despite what everyone says above, I feel I would want to ring-fence.
Actually, what I'd like to do is to provide a 3digit figure in thousands ring fenced, but then gift 10% over every year so that after 10 years the sum belongs purely to the DC.
This means that if they have a 'starter marriage' whilst still young they don't lose half to someone else.

I'd just say "dsons, there is money here for both of you when you buy your first house alone each. If you decide buy with someone instead, let me know if you still want help with the deposit and we can sit down and talk about how that works best for me and you"

Then just hope that they decide to buy alone.

Alternatively, could you put down a sizeable chunk on them buying something together, which they retain throughout their lives as an investment?

We are gifting ds money and he is buying alone. Fab. I wouldn't have given it to him if he was buying with a partner quite honestly. He is young, but when he hopefully does want to buy with a partner I would hope they will ringfence their own assets in the short term at least. He will definitely want to do that.
Also there is no way I would give money to any old cause. No travelling or shonky investments. He can do that as his own expense. I don't want to give him a 'gift'. I want to make buying a house easier for him. My money, my choice. He never knew this money existed until he started looking at houses.

I really wouldn’t feel comfortable attaching conditions to a gift like this - perhaps it may be easier psychologically to give them less so you don’t feel so strongly about the financial value / how much of your wealth it represents?

Ideally for me (though I have a toddler so really I’m talking out my backside) I’d be giving them the money at a point where I felt they’d appreciate it / understand how lucky they are to have it, and if they have a partner a quick word about tenancy in common or equivalent.

I'm of the opinion that a gift is a gift.

If your dc have serious relationships (married or unmarried) then they will likely share finances, and divide these if the relationship ends. That is life.

My parents bought me in a house which is solely in my name and when I got married there was a pre nup. If that's an idea? I've now been married for 5 years and we have a son but it still remains the same!

Op you seem very on the ball

But really, what possesses you to come on to mumsnet seeking an ethical debate on financial matters relating to family members!

I suggest you just seek legal advice and consult your own view whether this is something you want to do or