In-laws want their deposit back

[ArnosLeach]

I married 5 years ago and I have a three and a half year old and a nearly nine year old from a short lived relationship.

Full background as I am anticipating the questions I would want answering.

The nine year old sees their father once a month for a weekend. I assume that my ‘ex’ owns his house. He had a vasectomy before our child was born. We do not communicate on any level other than if arrangements need to change. He pays a set amount every month but every month will buy shoes/clothes etc.

We moved into the house my husband had bought fifteen years before. It has doubled in value. Following a miscarriage last year we are trying to conceive again and we are looking to move house. We mentioned this to the in-laws a fortnight ago. I did not know that they had provided DH with deposit.
They have now asked for twice the deposit back comprising the original sum and the proportion of what that deposit has added to the value.

They feel that my elder child will benefit from their largesse. We are both completely gutted by this. A bolt out of the blue.

They don't want your child to benefit from their deposit? Yet THEY want to benefit from their child taking on the mortgage for 20 years by asking for the deposit PLUS increase in value? That means they have treated their deposit on their son's house as an investment, because for the last 10 years savings interest rates have been below inflation, so basically they're wanting to make money out of your house because it's made more money than what the 80k would have done left in a savings account. Pretty shit thing to do to their own son, really. You don't look to profit out of family.

They obviously don't see you and DH as being long term, sadly. Even if it's not a future inheritance issue they're thinking of they'll be worried you will buy a new house in both your names then divorce him and take half from him.

You'll never hear the end of it if you don't give them any money back. They'll be slagging you off to all and sundry. I'd want the moral upper hand here though, so while I certainly wouldn't be offering the deposit plus increase in value.

Get DH to say to them (but sit down with him too) "The whole reason for the request has upset us both a lot, but we don't want this to come back on us financially or legally in the future and cause issues for either of us. So we are going to pay you the gift back now, and we will get some legal documents drawn up to show this as part of the sale of the house. We're both upset that it's become apparent that you wanted to treat the gifted deposit on our home as an investment, seeing as savings interest has been so low for much of that 20 year period, and house prices have increased so much. This wasn't made clear to me at all when you gave me the deposit, and actually to carry out your request puts me now at a great disadvantage if you're expecting a proper "return on your investment" as if it's a business transaction.

As a fair compromise, we've done some calculations taking into account what 80,000 could have earned you in interest over the 20 years if it had sat in a savings account. Here are the figures. We will repay you the 80k plus any potential savings interest, and that's all. We don't agree that it's a fair request to profit on the increase in the price of the house as that's pure luck. Would it have worked the other way - would you have accepted less back if the marked had dropped through the floor?"

I'd sort that all out, move to a new house together, and REALLY cut back contact. I wouldn't be able to let go of the hurt feelings.

Apart from the fact that he probably can't he probably doesn't want to.

@sandyhappypeople

Makes sense that they gave a sizeable deposit to set him up to support himself and his family in future. The house has doubled in price, so therefore so has the investment. He probably didn’t tell OP because what man wants to admit he needed a massive prop up from Mum and Dad?

He decided to get involved with OP and take on the child from a previous relationship. He is now part paying for that child (bills etc are not split 50:50 but relative to income), which diverts income from biological child/ren. They now need a bigger home because of the need to house the older child alongside children from the marriage.

Basically the parents are like if you want to go this path you pay for it yourself we don’t want to pay to support people we aren’t related to.

That’s removing emotion from it and viewing it from the purely financial perspective.

It’s an enormous amount of money and I suspect there is a lot more to this.

I really hope op comes back to update us. I'm outraged on her behalf and would like to have words with these bastards myself if I could! (Italian btw...) bastardi, and cattivo are the main two words.

They gave him money - there's no suggestion they stipulated how it must be spent. He could have used it for anything.

Certainly doesn't meant they can insist he repay them the original value of the gift and any increase.

I see your point, but in the interest of fairness to all her children, the original wishes should be followed. The mother could always write a note explaining how the split came about, and leave a treasured keepsake - piece of jewellery perhaps. But otherwise the other two children, who are already getting a much smaller share, might feel they haven't been treated fairly if part of their shared half is given to the child who is already getting her own full half.

We need Spock and his raised eyebrow to talk about logic here! Inheritance matters are always a minefield..

I would ask my solicitor and accountant to draw up docs stating that the £80k was an investment rather than a gift so capital gains tax is due on it. Notify HMRC that capital gains tax is due from your pils and give them pils contact details. You won't want to get into any trouble by withholding information on tax due. Then smile sweetly while your pils realise that their tax avoidance scam has backfired on them.

WTF. Tell them to......... Words fail me. If I understand the post and your replies the issue is purely that you have an older child who isn't their biological grandchild. And giving them their original "gift" back isn't enough to mitigate this. No idea how I'd cope with that, I'd be too angry. Let your husband deal with them.

Probably not helpful, but I'd never speak to them again

He probably didn’t tell OP because what man wants to admit he needed a massive prop up from Mum and Dad?

How utterly ridiculous, a lot of people need help to get on the property ladder, if you've got parents that are easily capable of helping you, chances are that is what they will do.. it doesn't make you less of a 'man', what makes you less of a man is hiding that amount of financial investment from your wife until after you're married.

Basically the parents are like if you want to go this path you pay for it yourself we don’t want to pay to support people we aren’t related to.

They aren't paying to support OP's child, they paid for their son to get on the property ladder.. and that's what has happened, it would be the same whether OP lived their or not, their son would still need somewhere to live? Why would it matter what size house it is, he's paying the remainder of it above the £80k so why would that matter where he lives or who he lives with, if they were really that bothered about 'outsiders' staking a claim then they could have easily have drawn up a legal document to say so.. they've dropped a quarter million on their kids properties, they're obviously not shy of a bob or two.

That’s removing emotion from it and viewing it from the purely financial perspective.

If it is a purely financial perspective then they would have made it clear at the beginning that it was either a long term loan, linked to the house prices, or a gift, 'apparently' they said it was a gift, but if that gift came with unofficial stipulations that DH was aware of (it becoming repayable when selling the house to buy somewhere else for instance), then DH would be aware of it.

the fact that OP hasn't asked her DH to elaborate on any of this is highly suspicious, maybe she's assuming it's to do with her son when really it was always going to be repayable at some point and he's just failed to tell her about it?

Her version of events just don't add up at all for lots of reasons.

Staggering.
What horrible people.
Don’t move fuck them.

I'm one of the few who defended the ILs, in the sense that it is not that rare to want inheritance to descend via the bloodline, and it is not incompatible with being a good person and even a loving step grandparent.

It would be better for their peace of mind to trust their son to do the right thing now and in the future, but maybe its just not in their nature and they will always be control freaks and worry warts.

So, keep the money. Don't go NC if you love them and they are lovely people. Don't judge them based only on this episode. Sort out your wills and powers of attorney. A postnup is unlikely to be that useful. When you have children together their needs take precedence with the court in any divorce.

If they genuinely said that about your eldest benefitting, they are horrible, sorry 🥴
I wouldn’t give anything back and consider going NC with them. It’s unacceptable to treat your eldest THAT much as an outsider

If they had got proper legal advice when making this gift, this is exactly the sort of issue that could have been bottomed out in advance. It’s pretty normal when making a gift to want to ring fence it in the event of sale of the asset, or life events like marriage/divorce. It is however totally unreasonable to want to introduce those rules after the fact. Your ILs seem fixated on a principle and don’t seem to realise how hurtful their behaviour is to the people involved. I wouldn’t be offering them any money.

Agree. Return the deposit plus interest and cut yourselves free.

I have learned never to accept financial support because it often comes with unspoken strings or indebtedness. Financially I would have really benefited from support but emotionally it simply isn’t worth it.

I think there’s a difference between wanting inheritance to descend through the bloodline versus asking for the money returned, plus capital gains. They could simply have asked for some sort of ring fenced sum with respect to the new property, or in their son’s will.

Well unless the children stay single their whole lives, it is very unlikely that cash gifts will remain solely for the benefit of the blood line. Even if OP and her husband remain together till death do them part, if he dies first she will benefit.

And even after she goes, which may be in, say, another forty years time from now, what does it matter to her husbands parents, who would be long passed away themselves, that they gave their son £80k approximately 55 years earlier that his stepson might glean a benefit from.

The difference here is that the money wasn’t lent. It was a gift. And other siblings received a matching gift which they are not being asked to repay.

Yikes they are totally in the wrong here. Unless they had an agreement that he would pay them back any value increase plus deposit if he moved.
As They gave the same amount to all 3 siblings it was clearly a gift. They are now presumably looking to cash in on the value increase and using your eldest child as an excuse / reason to demand this back.
I would honestly get your husband to sit down with them and say no. This was a gift with no stipulation that if the house is sold they want it back, there is no contract stating that it was a loan, that they have any claim to any profit once the house is sold and that your husbands family is none of their business, nor is how or when he decides to sell the house he used the deposit for.
obviously it’s your husbands decision but I would be prepared to go no contact over this. Asking for £160k back basically means it’s not worth you moving presumably?? That’s more than my whole house is worth!
you could seek a solicitors advice, if they think your parents in law don’t have a leg to stand on I’d go ahead and say no.

YANBU. Disgusting people

I think it's pretty disgusting when the grandparents decide that a child who is not a product of their child - should be treated differently. It's disgusting. Hurtful. Deplorable. And if it were me I would send them a bill for your services delivering their grand child for an amount that exceeds the deposit 100x and ignore any other claims.

If the deposit was a gift I would not return it. Clearly DH is unlikely to inherit anything because the in-laws are concerned about their money benefitting his stepchild. I'd see the money as the only inheritance he is going to get - unless you and him divorce - and not return it.

I have a relative who tied herself in knots trying to prevent her step grandchildren from inheriting anything. I pointed out that once she was dead there was nothing stopping half siblings just giving her money to the DSCs. I don't understand the attitude at all. It's so mean.

It's disgusting, OP. What does your DH make of this attitude?

There is more to this story than we have been told or even than OP knows. Somewhere along the line her DH made an agreement with his parents. Whatever that agreement was it should be honoured. OP may have been told it was a gift but I suspect DH will know very well that it was originally a loan. Rather than PIL being unreasonable it may be DH that is trying to pull a fast one. OP should stay out of it and let DH work it out with his parents. If I had made an arrangement such as this with my son I would expect him to pay up if that is what was agreed. He knows. They know.