To worry about giving daughter this money ?

[4seasons]

Daughter has good job but does not earn enough to buy a house in London .... who does ? She has decided to buy a house elsewhere that allows her to travel into London for work . She feels the need to get on the property ladder and stop paying high rents to someone else . She has asked us to " help" with the deposit . No problem with that, always intended to help her and we have inherited some money recently ( not masses I might add ) . The problem is she has a history of getting through money like there is no tomorrow! She received an inheritance of about £40,000 a few years ago which has " disappeared " . Also she received about £25,000 voluntary redundancy a year or so ago . We have no idea if any of this money from the redundancy remains . Originally she said she was going to put it into savings but we don't know if she did . She is very touchy about her finances being discussed and as she is mid thirties I can understand that having your parents quiz you isn't great . We don't by the way ... quiz her I mean .

Am I being unreasonable to feel very uncomfortable about just " handing over " this cash with no strings attached ? My husband just says we should " sign the cheque" and have done with it . He's never been money - mad or grabby .I suppose I am concerned that we will never again receive a nice sum of money as an inheritance and also that we have no way of knowing if we will need money in the future .... for our nursing homes !! Also , I feel that if she really wants a home of her own ( she is single by the way ) then perhaps she should share some of the financial " pain " .... if that makes sense. This is not an inconsiderable amount of money ...£27,000. We have both worked hard all our lives and until very recently never been given a penny by anyone else , nor expected it . I feel really terrible even asking for your opinions because I know I shall give it to her eventually because I want her to be happy and secure. Your thoughts please ?

And I need to use more commas!

She's possibly still got the bulk of the 25 grand redundancy money, depending on how quickly she got back into work. If she has, I'd be minded to match what she has in savings pound for pound.

If she's got nowt then she should be getting nowt.

Ummm. I'm 36 and I'd rather burn than ask my parents for a deposit for a house! What is she putting on the table towards the property?

Actually, does she need £27K for the whole of her deposit? Or does she have £20-30K and needs another £27K? Because that would put a slightly different complexion on things, IMO.

There are some very interesting legal bits and bobs in people's responses which I have actually found encouraging .I like the idea of the money being accounted for by a solicitor and having to say exactly what the terms of giving / lending the money are.I think I would like some paperwork drawn up which says that should she sell up , the money would be returned to us unless she then purchases another property.
Trying to be clear with myself about what it is that makes me feel uncomfortable about the whole business is difficult. I think we , particularly my DH ,have been too quick to say we would provide the money without clarifying any conditions . Personally I should like the assurance that she has some savings set aside, not for a deposit , but in case of boilers blowing up / windows needing replacing etc. Things she hasn't had to worry about in a rented property .I don't want to end up financing stuff like this in the future. Years ago, when she got her inheritance , she bought a flat but when things got tough financially ( ie she couldn't pay the mortgage AND run a car AND socialise as much as she wanted) she sold up , basically at a loss . So, even more money down the drain . She is older and wiser now, or so she would have us believe , but I am still very wary .

I want her to take responsibility and budget properly for her future.

We are both retired now so no prospects of any further pay cheques from work but at least we have decent pensions. I suppose I was looking forward to being able to be a bit more " frivolous " with some of our inheritance and now this seems less likely. Don't get me wrong , we aren't struggling and could afford to give her this money but something just doesn't feel right about it .

Has she got a enough for a 5% deposit on her own? A few of the banks do schemes where the parent puts 10/20% into a secure savings account that cannot be touched and then your daughter would get good interest rates. And then after 3 years you get your money back with any added interest. If she defaults on a payment then the monthly payment gets taken from that account. It could be a good way of helping without losing your money?

"I suppose I was looking forward to being able to be a bit more " frivolous " with some of our inheritance"

Well, it's your money, and barring a lottery win, this is your last, only and finite chance to boost what you have.

Honestly? I wouldn't give it all away.

She's planning to buy a house? What about another flat instead?

We're in the process of buying a house and we have a contribution from my parents towards the deposit. We were going for a 95% mortgage, as we could comfortably afford the 5% deposit plus stamp duty and moving costs etc with a decent 'safety net' left over. My parents asked how much we needed to get to 10%, so we rejigged our calculations to show a balance between putting in more of 'our pot' and thus getting the smallest contribution from them, still leaving some (now lots smaller!) 'safety net'.

We set all this out in a spreadsheet showing various options as to their contribution. Would something like this may be of more benefit to you and your daughter, as the mortgage company will thoroughly assess her monthly outgoings to ensure she can pay the mortgage? Rather than just hand over the total cash, she can show you what she needs - £27k won't be enough for a full deposit in London including stamp duty, so she must have some savings to contribute??

Regarding actually giving her the money (if you do), there could be legal/IHT implications - you and your husband can each give £3k/year IHT tax free, and can include last year's allowance if unused - so you can give £12k in total IHT free. How the rest of the £27k would be treated, i'm not sure. A cash gift needs to be declared in the purchase, and will need to be evidenced with ID of the giver, and a letter stating it is a gift (mortgage companies do not like loans!!) and you have no interest in the property.

There is also something called a gifted deposit, which I think is a payment directly against the deposit, but needs to be evidenced with savings statements etc. If you google you can find plenty of examples of the mortgage company forms and terms for GD's.

I'm not legal in any way, is just that we've been through this from the other side in the last fortnight :) We didn't ask for the assistance, but was incredibly gratefully received, for us makes a mortgage payment difference of about £200/month!!

I think you can ask how much the property is that she is viewing, how much % the deposit will be and ask how much money she has saved by the value of the property she is looking at. Some mortgage companies will ask for 15-20% deposit, that could be easily £40K ish.

I wouldn't just hand it over given that she's worked her way through 65k (discounting student debt etc). That's a hell of a lot of money to fritter away, and now she wants more?

For 27k you won't get much if anything. Had she for any money saved at all? What about solicitors fees, surveys etc? Few mortgage companies lend with a 10% deposit anymore. So where will the rest of the money come from? You? We needed a 15% deposit for our London house 2 years ago.

And if you want to be frivolous then why not? I wouldn't ever expect my parents to fund me as an adult.

Been thinking about this - would it be an idea to get a deed of postponement so you put a charge on the property after the mortgage lender so that you would have to be repaid in the future? They can be removed at any time.

Just read your comment about something not feeling right. I think you definitely need to put a charge on the property to cover yourself. You cab 're-lend' the money if she moves and do the same.

If it doesn't feel right then don't do it.

My parents helped me out with my first house deposit. We set it all up legally through the solicitor that they owned 1/4 of my house and if they asked for their money back, I should repay it at my earliest convenience. They asked for it back when the housing market was at its peak and fortunately I could afford to raise my mortgage by then. House prices then took a nose dive, but that's just life when it comes to investments.

We still have a very good relationship and both respect each other for the way it was handled.

My husbands parents gave us the deposit for our home which was 86K plus the helped us furnish it. We are very grateful as we had been expats for years and even though we had good jobs in London we had no way of pay rent and saving that deposit... In return they are delighted as it means we won't abscond to warmer places in the near future ;-)

However we had to be very open about our finances and while the didn't ask for a legal agreement we demanded one be created. We also pay them back 1000 a month which covers us in case the pass away in the future and also it gives us the equity in the deposit and our mortgage.

The would have just given us the money but due to their age it could have caused issues in the future. Also we don't want to be beholden to them.

Your daughter should want to pay you back and you should have a legal agreement drawn up about repayments about this or a share in equity when sold to protect your investment. Even if the repayments are nominal it would teach her the value of what you have done for her. She should also be very open about her finances- she would have to be with the bank.

She has thrown away 65K, she would have no issue doing that to your 27K. You're right to be concerned.

I discussed all this again last night with DH and his attitude was " if you don't want to give her the money then don't ". So, effectively the decision is mine ! We've received a detailed breakdown of her finances as we requested via e mail and she can certainly afford the mortgage even if the interest rates double .. so no concerns there. I have asked if she has any of her redundancy money left and been told " yes " ... but no details . At some point I shall ask her point blank what savings she has .I am of a mind to say that we will provide the deposit but that if she wants to move in the future we want the money back ( no interest or anything ) unless she then buys another property. The worst case scenario as I see it would be that she lives in the house for a year or so , gets fed up for whatever reason , sells it , rents again but pockets the money we provided .This makes her sound dishonest .. she isn't , just profligate with money and a poor manager . The upside of this is that she is kind, generous, funny and open- handed .

I am going to very blunt about all this and voice my concerns to her. If she is offended by what I say... tough. I think it is time for a bit of plain speaking from me . Her dad just doesn't want the stress of all this .... hence giving the job to me ! I am going to tread carefully though as I don't want to alienate her over money which we can actually afford to give.

Her brother is being a bit " sniffy " about us helping her, but the way we see it is that he had a private education which we paid for ( she didn't because she didn't pass the entrance exam ) and also has a wealthy wife . They certainly don't need our financial help and have their own nice big home , cars etc. In the past his wife has made remarks about being " fair " to offspring ! They have no money worries though , nor are they ever likely to have any, so I refuse to justify what we do with our own money . DS wasn't " sniffy " to us , just to his sister . He probably realises what we would say back ! I think I am a bit of a Marxist .... " from each according to his skills, to each according to his needs " .

I will probably be shot down in flames now for getting the quote all wrong or out of context!
Thank you to all the people who took the time to help me get things straight in my own head . I really appreciate it .

"I am going to tread carefully though as I don't want to alienate her over money which we can actually afford to give."

Why would it alienate her?

It's your money to do with as you wish!

She's not entitled to it even if you can afford it!

Seems that she has already had chances to put down a deposit or put a good chunk away, but chose not to.

Hmm, open handed, eh? That could be taken either way... She certainly has no problem holding her hand out for your money...
Wrt your son not needing your help; your daughter has gotten through 65 grand with nothing to show for it - she doesn't "need" your help either.
Be very careful, you actually are favouring one over the other and this rarely ends well.

Eek, just saw that you have a DS too. Gosh it's so complicated isn't it.

I can just imagine the conversations between your DS and his wife about you helping your 'wasteful' DD. It really is a minefield isn't it.

Yes, for her brother, she burns through money & gets given help.

he doesn't & so gets nothing.

I wouldn't give it to her. If she had never had any money maybe, but the fact that she has nothing left out of the £65K would put me right off. It gives me the impression that her attitude towards money is a bit 'easy come easy go'.

So she has frittered £65k already you don't know what?

Wow.

What a stupid girl.

Oh DS does burn through money .... but it's his !!! Point taken though re. It looking like favouritism . Strange though that DS thinks we favour DD and she thinks we favour DS ! It is certainly a minefield. When he was younger though DS had several expensive hobbies that we forked out for etc. so I don't feel any guilt about helping our daughter out by giving her a deposit on a home if we want to . He's also benefited from handouts in the past before he became " comfortable " financially. We also do quite a bit for him and his family .... childcare, DIY etc. so it isn't as if he has missed out ..

I am in a similar (though different) position, where I am about to give my dcs some money. For one dc this is a big contribution to buying a house. I have always been wary about interfering in dc's financial concerns, and I am absolutely clear that this money is a gift to dc with no strings attached and no hold over the property. However, we are both adults and dealing with a very adult sum of money, and so we have both had to put aside our reluctance to share financial information. I know how much dc has in savings, and how much the mortgage is. Dc knows how much I can afford to give as a gift, and how much I have left for my own 'frivolity' . But, for me, this is a 'moment' and in 2 years time I won't know how much their mortgage is, or whether there are savings, and dc won't know whether I've used my money to make a down payment on a care-home place, pay for my funeral, or spent it all on La Perla underwear.

For my other dc it is different, and the money is not yet needed for property (or any other significant purchase). It is difficult because it is about trusting that dc to save it wisely for the future. Dc knows that if the money is spent on bikes, cars, clothes, holidays, then that is their choice and there is no more for a house deposit in the future.

The decision about what to give, and when to give it has only been made once I was sure that my future was secure (with a sufficient cushion for me to have occasional new shoes or to still be able to treat dcs to a meal out), and also has been meticulously recorded, because in the unlikely event that I should die within the next 7 years then the money would have to accounted for.

It is easy to feel uncomfortable about discussing money, and death and taxes, and responsibility, but there is no way I'd be handing over significant amounts of money without having those discussions, and without feeling comfortable that everything was clear and understood. And fwiw, I think your dh is being a bit laissez faire leaving it all up to you... Presumably your ability to have some frivolity in your retirement is a shared issue? And likewise your responsibility to provide for your future care needs?

She certainly has been stupid . No arguments there. But then so have we by the sounds of it !! Just trying to do our best to be parents and making mistakes along the way like everyone else ..... sigh.