How to advise DD

[cupfinalchaos]

Dd 29 been with partner 5 yrs and they rent together. Neither of them are particularly high earners and dd assumed if they got married they would get a mortgage together. Partner’s dad has now decided to help his son buy a house via a trust fund- so the trust would be taking out a mortgage. It transpires his dad is a very wealthy man. I don’t blame him with the divorce rate as it is. They would both be living there and partner would not want dd to pay rent.

Aibu to help her get a small buy to let so she has something in her (or the mortgage lender’s!) name? We can give her a small deposit. I’m not sure what to do for the best.

The PP is asking why you feel the need to.

They are getting married and starting a life together. Why is the Dad getting so involved? I can understand him protecting his son’s assets, but he shouldn’t be dictating how and what they do.

I would do that, but if the partner respects her enough and wants her to be his wife...then he needs to put her name on the mortgage. He could go after anything she has. He needs to prove his salt and make sure her name is also placed on that house. If he won't do it...tell her to run for the hills.

If she has a buy to let and later wants to buy her own place to live in she will have to pay second property stamp duty.
Being a landlord is a pain in the arse and not profitable if the property is mortgaged.
It can be very difficult to get tenants out and they can do a lot of damage before they leave.
Don't do it.

@cupfinalchaos As pp have said a S&S ISA is a sensible option. I would also advise your daughter to save what she would be paying in rent/mortgage into the S&S ISA on a monthly basis. There are simple investments like index tracker funds that she can put money into each month.

In addition to a pre-nup I would be looking at a co-habitation agreement that clearly sets out that your daughter is not responsible for maintenance of a property she doesn’t own. It’s really easy to get swept away in the excitement of setting up your first home that you pay for things that you will never own e.g. light fixings, curtain rails etc. I also agree with pp it needs to document what happens when children come along.

I know it sounds unromantic but you only have to read threads on here to see how naive many women can be and leave themselves in a financially vulnerable position.

Why not open an isa or Lisa for her. Her boyfriend doesn't sound committed if he wants a pre nup.
I could maybe understand if he was a multi millionaire but not if they are earning approximately the same amount.

He is due to inherit millions unfortunately sooner rather than later. I hadn’t thought of it that way that he sounds non comited because of that.

Absolutely.. she won’t be spending money on his house but until they get engaged there’s not much else I can do.

Are you saying he should be putting her name on the mortgage even though she hasn’t contributed? And if so surely not in equal shares?

That’s exactly what he’s doing.. protecting the assets.

Why does she need something in her name? Presumably she can now save more of her income because she doesn’t need to pay rent. He’s not taking anything away from her by giving her free lodgings.

Also I signed a prenup. They’re not legally enforceable in the UK and are meant to be reevaluated every 5 years and after every major change (ie child) to ensure they’re fair in the eyes of the court. If this isn’t done good luck to him trying to prevent her from getting some of his money after say 15 years and 2 kids.

Why would she need to keep the buy to let in this scenario?

She is an adult. She has to open it herself.
However op can gift her the ££ to her current account to then pay into the isa of choice or isas

Just an update.. she asked him if he would like her to put money in to the house he’s buying and his answer was not this one (I assume as they’re not committed yet) but definitely the next one. I’m happy with this as at least he’s open to the idea. After all your amazing advice I will be putting her off a buy to let!

Why does anyone need to own a home then? Is it that challenging to understand I want security for her? No, not his money, ours (deposit) and hers by way of paying towards a mortgage. Anyway if you’ve read my update it does seem he’ll be open to that when it comes to their next move (only plans to be in this one a few years)

I would say after 5 years at 29 he’s wasting her time if he’s not proposing. She needs to move on.

You're an adult as well You don't need to correct every little thing on here like a 3 year old. I'm sure the op would do a little homework. It was just an idea amongst many others.

A managing agent reduces the hassle, certainly, but it also reduces profit.

If you don't know anything about stocks and shares - that's okay. What many people is put money into an index fund. This means that rather than buying specific stocks, you buy a tiny amount of all* the stocks. Vanguard does this well (I am a Vanguard customer, but otherwise I have no financial interest in Vanguard)

If you have a buy-to-let property, you've put all your eggs in one basket. And one nightmare tenant, or a fire, or a property crash could leave you in trouble. Using a stocks and shares ISA you can spread your risk between different companies and different countries.

• Technically not all. There's usually some criteria, like "all large UK stocks" or "all medium to large sized global stocks"

Wanting a prenuptial is usual for people wanting to save their inheritance where's a substantial amount involved and nothing to do with commitment.
It's safeguarding their assets, nothing wrong with that, a woman can do the same.

You are right to help her think this through.

I’m not married but the high earner (female). We purchased jointly despite disparity in contributions, as there was an implied and mutual understanding. No one thinks it going to be them who splits.

The other person in this case didn’t give up their career for the kids, they gave up their career to work v v PT and pursue a hobby which left me to cover almost all family expenses working FT in a super stressful role. There are other things I won’t go into. Over 10 years it’s hundreds and hundreds of thousands difference. If we split they default to 50/50 ownership unless I pursue in court via TOLATA.

The other party is right to protect their asset but what is expected of your DD should be clear ie. is she expected to contribute to half the mortgage and upkeep etc. or nothing. There could be declaration of trust stating %’s for example. I would keep this seperate from what then needs to be a different agreement in the event of marriage.

It’s great that you are looking out for your daughter’s interests, but you won’t be around forever. She needs to take responsibility for her own financial wellbeing. If she isn’t minded to do the research herself, please encourage her to find a financial advisor to help her navigate it. She really needs to take control of her own situation here for her future wellbeing.

I would hate this. You want to build a home and life together. As a PP said, will this ever be her home? Can she redecorate? I get the practicalities but this could be really undermining to their relationship. How does your daughter feel about it OP?

@cupfinalchaos i would honestly advise her to be very careful about marrying a man who would consider the marital home his asset only and who would take steps to ring fence assets in this manner. And as others have said, she should be very careful about her own financial position if they do get married down the line.

Can’t you set up a trust for her? I don’t know anything about them so maybe they’re expensive, but would that not protect her assets in the event of a divorce?