Should I accept a gift from my mother if she wants to exclude my DH from it?

[giving]

My mother has come into a largish inheritance and wants to pass some of it down to me for IHT purposes (she has taken advice).

She has relatives abroad that have suggested a good property investment. She likes the idea of this property because we can also use it as a holiday base near her family. Her gift would not buy the property outright, but would fund the deposit with the rest needing a mortgage. Neither she or I work, so my DH would need to apply for the mortgage and for the mortgage to be in our joint names.

My mother is keen to avoid my DH having any claim on the property for a number of reasons, mainly she doesn't like him very much (lots of reasons) and she is worried that we may divorce because we row a lot. FWIW, this is unlikely in the foreseeable future.

My mother has taken legal advice and has come up with an "off-shore trust" method of ownership whereby she and I are the Trustees/owners but my DH is still liable under the mortgage. She doesn't want to tell him that he won't be a Trustee, and he thinks it will be a gift towards our future pension. My mother has said that she will act as an unofficial guarantor of the mortgage so that we won't lose any money or go into debt. Therefore it should be risk free for my DH but obviously he is excluded from any benefit as well.

Is my mother entitled to do as she likes with her money or is this using my DH and opening up a can of worms for the future?

Honest feedback please.

As you seem to think that there may be a possibility that you could split from your DH in the future, it would be prudent not to go ahead with this plan as you have decided.

He would probably be able to use the fact in the divorce court that you had lied to him to get him to obtain funds for your family (bacically obtaining money by deception). Actually, this would probably be considered fraud, and you could get into an awful lot of trouble, not just stung financially in a divorce!

Only read op and first 20 messages or so...

So it sounds as though you have problems in your marriage but if you do this behind your husband's back I think you are well out of order. If my dh did something like this and I found out it would totally undermine the trust in our marriage and because of that I would probably leave.

If you have problems and they are what are making you even consider this, don't. Try and sort them out or not depending on how you feel about them. Do not try and trick him like this.

My parents have actually been explicit that if they were to die after my sis or me then our share would still go to our dhs. It seems strange (in our case) to not want them to benefit as clearly them benefiting will only benefit their grandchildren...

However both my sis and I have lovely reliable other halves who get on really well with mum and dad and they know this would not be abused. I'm not saying I think this should be the case for everyone as I know other's situations are very different!

agree with jammi in this case though.... The problem is the dishonesty not your mum wanting to protect her investment from your dh who she doesn't see being around for the long haul

The problem, alicet, is not your dh and bil though, but any subsequent marriages they might make. I saw this with some family friends some years back. A large chunk of the family money ended up going to the new wife and her family after the son-in-law later died, and the grandchildren lost out, not just on the money, but also family heirlooms. It was horrible.... but, as it was years ago, people are a bit more aware of these things now, and there are legal things that can be put in place to ring-fence family inheritances - what's left after the government have taken their cut

giving, offshore trust or not on a divorce a judge is obliged to consider what assets are avialable to both of you should you divorce.

Your mum needs her head examined and failing that better legal advice that she has had to date.

It's not wrong for your mother to want the money to benefit you rather than your DH, but it is very wrong of you and your mother to try to defraud him, whatever he has done. And you would be defrauding him by making him pay a mortgage for a property he will never own.

giving it sounds like you've taken all of the points on board very well.

I'd just like to add that whilst it is totally up to your mum what she does with her money, the fact that your dh is good enough to be used for the mortgage, but not good enough to benefit in the future, would be a deal breaker for me. Your mum may have your best intentions at heart, but you can't deceive your own husband in this way.

Whatever happens don't lie to him. He may well agree to it on the basis that it protects your future and if you are still married, it benefits you as a couple anyway.

Overall I think this thread has thrown up a lot more questions than answers for you. Totally agree you need to talk to your mum. And avoid deceiving your dh. But most of all, you need to talk to your dh. You may well be able to work through your issues and save your marriage. But you won't know unless you try.

Appreciate the further comments and advice.

I think my mother was hoping it could all be done quietly because the lawyer is abroad and would sign all the papers for us via a Power of Attorney (including the Addendum which puts the property into the Trust). Therefore she wouldn't openly need to say to DH "I don't want you to benefit from my money and I'm worried you might split from my daughter". However this is a bit naive because I guess any lawyer worth their salt would have to put it in writing to DH that he was signing away his ownership rights whilst being liable under the mortgage. Otherwise they could be sued for negligence I imagine.

In my mother's defence, she genuinely believes he is at no risk from the mortgage because she will step in and meet all the payments if there is a shortfall from the rental income, but I guess she hasn't factored quite how expensive this could be over the years if there are any serious problems with it.

Ultimately, I can see that it's not fair to manipulate DH like this and that he could well think he had been stitched up. Another worry is that it gives him false expectations about his pension position. TBH, I think my mother is a bit of a "me and mine" type of person, but I agree that when you are married your loyalties have to be with your spouse first.

"Another worry is that it gives him false expectations about his pension position"

Can you imagine thinking you didn't have to worry too much about your retirement and then finding that actually your wife and mil had shafted you and you were broke. Bloody hell.

Ebveryone's already commented plenty on the moral highs and lows so I'll skip all that...

Over the years I have had 6 different investment properties in different places/countries... only one of these ever consistently provided more income than the cost of upkeep on a day to day basis. All the others sucked money away, constantly. New boilers and voids and management fees and mortgage increases and insurance and so on. I would never now own an investment property on a basis of anything other than outright ownership because of this - just too risky. Especially now when property prices are dropping in other countries at the same rate (or worse) than they are in the UK. Who covers the loss if you need to sell up and end up with a £50k negative equity bill, say?

Also, if the mortgage is going to be paid out of rental income, then that info needs to be expressly provided to the mortgage company upfront (who will then quote on a higher mortgage rate to reflect increased risk), otherwise it is fraud in many countries.

Having a holiday property sounds like great fun and it is so easy to think how it will 'pay for itself' in rental. Truth is it is a minefield. You either do weekly holiday lets and have the huge costs of keyholder/cleaning services and the constant stress of dealing with enquiries/bookings and worrying about huge gaps in lettings, or you go for longer-term tenants and take on the additional risks of that (tenants in some foreign countries have much more extensive rights than they do in the UK, so it can in some instances prove impossible to get rid of them).

You also need to bear in mind that the cost of buying/selling can eliminate much of the profit you may make in terms of capital gain. Here in the UK we have extremely low 'moving' costs; in other countries you need to think about legal fees of up to 10% of the price, estate agent fees on the resell of up to 10%, and then tax on any gain. Then some coutries might also impose restrictions on your ability to remove any profit from the country. Then there is the political risk....

Lots of pitfalls.

To add to what Squiffy said. My sister owns flat in the Canaries, and the first few years she would rent it out through an agency while she was home, a month in Christmas, for Easter and 2 months in summer. She cant be bothered anymore.

Holiday makers treat rental flats like shit. No care or consideration, on every occasion she came back to find damage worth more than her rental income. The agencies were not reliable enough to retain any deposits as they wanted the clients to use them again and recommend their agency/tour operator at home. In many cases they tried to cover up by getting cowboy repair men in and botch the place further. Now she just let her friends stay there for free, because "houses need people" so it is looked after rather than empty.

What twig said

Hi Giving

I came across this old post in a search on MumsNet. Can I ask how you resolved the property abroad problem? And are you and your Dh still together?

Karen

Giving - You and your mum sound like con artists trying to screw your husband over.

Im sorry if you have not had a happy marrige. if that is the case then leave do not fuck him over.

If she put a deposit down but he was the sole person on the morgage then legally the property would be his and his alone (ok and yours cause your married)

Or if she changed her mind and not paid the morgaged he would be fucked.

Do the right thing and tell your mum to fuck off.

I just read this thinking it was a new post.

That's harsh! To expect someone to pay a mortgage on something they will never have any ownership of! Jesus!

Sounds really coniving....

Your DH is being used and lied to.

I can see why your mother might want to protect you but I think this way of doing it is controlling and seems almost guaranteed to lead to arguments. For starters, how is he going to feel as and when he tries to sell it and discovers he's not allowed to profit from the sale? That's a recipe for resentment and is putting more pressure on your relationship. In my experience fights over inheritance can split even relatively happy families, let alone ones where there are already rifts and problems. Also regardless of whether you think its a good idea or not you must tell him as well -- its not on to hide this sort of thing in a marriage. If your mother is adamant about protecting her investment from him she must 'fess up to him now. My guess is unless he desperately needs the money he would probably tell her where to stick it, freeing her from the dilemma, but at least this way she's being transparent.

Why would any mortgage lender let someone take out a mortgage on a property they don't own?

This thread was started 3 years ago! Would love to know how it turned out.

Normally I would say that your mother has the right to leave her money to whoever she chooses, but this is patently unfair.

If she wishes to make some kind of bequest to you to skirt IHT issues, that is fine and understandable, and to ensure that her family money stays with you is also understandable.

The getting your DH to make the mortgage payments when he will never own the property is outrageous, and asking you to lie to him too, that is worth of divorce right there.

She needs to look at this in another way, perhaps leaving the money to your DC, to be held in trust for them?

WRT this property, without knowing where it is, I'd urge caution, global property prices are still falling in many places, and holiday homes has got to be one of the hardest hit areas, proper research needs to be done before any money gets spent there.

I wonder, but if your relationship did ever go bits up, and this property was being paid for by him, regardless of the trustee status, I wonder if a relatively good solicitor would be able to successfully argue that as neither trustee could actually ever get a mortgage, and have paid nothing toward that mortgage, that your H paying all the instalments would have a claim on at least half of YOUR half as you are husband and wife.

If your relationship is not healthy, the last thing you all need to be doing is creating further financial entanglements.

I would also ask you giving, be honest, is your mother a friend of your marriage? or is she aiming to destroy it, cos this sure looks like a very nasty move.

and....if your DH (seems rather inappropriate that term DH which is supposed to mean your 'darling/dear' husband I believe) is under the impression the money is a gift towards his pension...then what happens if he depends on that gift and neglects to make any serious provision...or to top up his own.

Starting to think this could be somewhat criminal

oops! zombie thread... ARGHH!

MegBusset 'Staying together for the sake of the children' is bolleaux btw (and I am the child of divorced parents).

Agreed. If you're in an unhappy marriage they will pick up on it, regardless of how much of a happy face you put on. And that will make them miserable too.

If you're unhappy, leave and start a new life - I can't believe that you'd even consider for a millisecond that your mother's suggestion to shaft your husband for the rest of your working lives was appropriate. Do you really think that the fallout when he found out would have made your children happy?