How can parents help protect gifts or inheritance if children divorce?

[Springiscoming368]

We have quite a few friends getting divorced / separating. Must be the age we are at. But some of these people have been married over 10 years so by UK law most things are being split 50/50.

Even if someone had inherited 150k and brought a house outright the partner has a claim of upto 50% of it. If parents have gifted them 100k for a house, again it can forced to spilt 50/50.

It’s made me think how can I better protect my children in the future. I’ve heard prenups don’t always stand up in the UK. If I gifted my children money how do I protect that so it stays with them? I’m hoping they never get divorced but there seems to be a high rate within our friendship groups at the moment.

I think when children are involved it’s a different situation for sure.

I think that giving money to grandchildren will increasingly become the norm. Your grandchildren might divorce but you may be less likely to witness the divorce.

Yes definitely @Thistooshallpsss I'm 50 and know a few men who are divorced and annoyed that their wives - the mothers of their children - got some of "their" money in the divorce.

I lose all respect when they talk like that. What did they think marriage was?!

My father put everything into a Trust for my sister and I but did so under the guidance of a lawyer and wealth management company who were experts on this and made everything watertight, not sure of the details though as my parents sorted it.

If your children are entering into a marriage then they surely know the legal ramifications of that and that property will be considered joint property. I would certainly feel quite infantilised if my parents put measures in place to "protect" an inheritance from my partner. We are a unit and what is mine is his and vice versa.

I feel like you’d get a very different range of responses if you asked this question from the perspective of a woman looking to buy a home with her DH but the ILs are already speculating on whether they'd split, or unable to separate because her ILs paid for the house that her children live in.

Money isn't everything and you'll ruin plenty of relationships trying to hold onto it.

I think we all know that comes for many people with the proviso “until we fall out”.

So don't make the vows and don't get married. With how easy you can divorce these days, people are too quick to forget that a marriage is an actual legally binding union.

I’d be pretty annoyed if my parents had tried to ring fence my inheritance or generally try to control what I did with my own money. Dh and I are a team. I made a very intentional choice when I married him that our legal and financial interests were tied for life. I have had a significant inheritance (£250k). It went into our mortgage, we are joint tenants so it’s 50/50 (Dh also put in nearly £200k).

Dh also owns a company with a turnover of £60k or so a month. I have zero day to day involvement in the company, but I am a co-director with access to all accounts. Because we’re a team. I don’t need anyone protecting me. I’ve made very sensible decisions for myself. If I didn’t want to be financially tied to my husband, I would not have married him.

Vows aren’t part of all Christian denominations. They’re a western Christian thing.

Anyway, marriage doesn’t have to mean that all finances are shared. My husband and I have joint assets, but we also have ones held separately in trusts.

Don't make it an outright gift, secure it with a charge on the property then it has to be returned to you in the event of a divorce. Still subject to iht but that may be a price worth paying.

But you and your partner appear to be of similar financial standing. If one party has very little financially to bring into the relationship you can understand why the other party wishes to protect their assets . . .

You get married with this concept being true and accept it as part of that. Grow up and accept it, or don't get married seems to be the easiest way forward.

If giving a deposit for a house, you could make it a loan (properly documented) but that has IHT consequences as the loan receivable is an asset of yours on death

If you have been married for a decade/have dc why would things not be shared? DH & I had family help to get on the ladder & I had family help later to pay for renovations. Both of us are aware if we divorced we would lose some of “our” money but we see it as joint family money in the first place as we share common goals.

Or just don’t get married to protect your money.

Why do you need to control your children's money and decision-making to this extent? If you gift the money, you gift the money.

If your adult child chooses to marry, they are making an adult choice to share their finances with their spouse.

The only foolproof way is not to get married. Trusts are administratively tricky and can be not particularly tax efficient. Plus a judge can cut through a trust it if it’s obviously inequitable on a divorce.

I often see clients specifically including spouses of their children which I find really sweet. Particularly daughters in laws. Who wouldn’t be fond of someone that’s been a support for your child for years.

This OP - I have seen this work well in practice.
The parent got that loan money back when the house was sold in the divorce.

And then reloaned that to their child so they could buy their new place afterwards. (Otherwise they'd have never been able to buy.)

Don't gift it to your children but save it to gift to ant future grandchildren.
Or tell your children not to marry if it bothers you so much.
Alternatively, let them make their own choices and trust they will marry happily and it won't be an issue?

I have a friend whose family are very rich on her mother's side and it was instilled in her to be wary of gold digger men & of trusting anyone in a relationship because they might be after her wealth.
It really messed with her head to the extent that she found it hard to have a proper relationship & missed out on having a family, something she now very much regrets.
She has finally found love in her 50s but her mother's interference for fear of her losing the family money in a divorce (her parents were divorced) really affected her view of relationships for many years.

Well there are pros and cons to marriage. Im not married so my assets will reman my assets

on the flip side, inheritance tax!

@mindutopiaDo you think you would have felt differently if there were a greater financial disparity between you and your partner? I'm in a similar financial position to you but my partner brings minimal assets to the relationship, though he works hard and in a year or two we will be earning roughly the same. Romantically, I absolutely want to get married but the financial implications if we divorce are horrifying - I can't see that we would unless the marriage turned abusive or there was infidelity and the idea of losing the security my parents worked hard to give me to some who at that point would have turned into a monster is really troubling

IMO the law needs to change, so that money given to a married adult child e.g. for house purchase, can legally stay with that child if they split.

A Swedish friend informs me that this is the case in Sweden - it needs to change here. But then successive governments here so rarely seem to do the obvious, common sense thing.

@mindutopia would you feel the same if you put in the 250k, your husband didn’t have a company and a minimum wage job. Cheated on your then took half of the 250k? If you would you are a bigger person than me.

if you both have a similar finances it’s not an issue, but if one partner comes our significantly better off and had been cheating (case of my friend) or another where the husband has been emotionally abusive and walks away with more money than they started. This is where I take a bit of umbridge

Be very careful I know if one couple ,he has a trust and the fear of her being a gold digger has over shadows a now 15 years relationship massively impacted by this trust. It's been very very sad to watch and a waste of two lives that could have been happier without this fear