Legally speaking can in-laws ring fence inheritance should we split

[Nillynally]

This is purely for my own curiosity...
Could a large sum of money given to my husband by his parents to boost our deposit be ring fenced so that if we ever divorced I wouldn't be able to have half? The money was an inheritance to them that they decided to share with their son. It was given and not loaned. Legally speaking, could they have gotten this money protected?
To add, they didn't do it but mentioned it and then they changed their minds but I wonder if they really did change their mind or whether it actually couldn't be done as being married and dividing all assets would supersede it?
I hope I'm making sense!

so your ILs are "gifting" a sum of money to your DH that remains his in it's entirety if you divorce?

no idea of the answer, just wanted to understand the situation,.

I don't think this is possible is it? All assets are joint once you get married. Unless you have a pre nup (but these are not legally binding in the UK). I'm not an expert though.

Yes that's what I'm trying to get at. They didn't do it in the end but I wonder if it was because they realised they couldn't or because they chose not to.

I dont think they can if it is a gift. It will count as part of the marital assets if you were to divorce.

If they did it as a loan then depending upon how it is written up then it may have to be repaid

I couldn't ring fence my own money in that situation so I doubt they'd be able to ring fence an inheritance.

I would have thought they could have set it up in some way so that it was a loan or else they had a part share in the house with a caveat it would be inherited by their son should they die. There are always ways around if that’s what they want to go.

That's what I think @TigerBeetle

You can though even if married. Example if dh put 50% of value of house down he can ring fence the deposit so if you split that amount is returned and any equity after that is split 50:50 between you.
Pretty common place in house buying.

Thanks all. Thanks @Pleaseaddcaffine yes I've seen that done before, just wondered if it was different when it was a gift from them.

If you divorce it’s all on the table hence why it’s so silly married people keeping “their” assets separate. Otherwise the wealthy breadwinner could just say “tough luck” to the sahm and waltz off into the sunset.

They wouldn't be able to ring fence it on their own. But usually they would have to provide a letter noting that the money is a gift and that they would have no claim on the house, at which point your solicitor would/should have asked your husband if he wanted to ring fence it.

We’re they planning a Deed of Trust?

They couldn’t have ring fenced it in a way that was legally water tight, and still gifted it.

However, you and your husband could have been Joint Tenants on the house with an equal share. He also could have had you draw up a document with a solicitor - and you have advice from a second solicitor to say that you viewed it as ring fenced. To then add more, you could have had a pre nup - or if already married a post nup - stating that it was ring fenced for him. Obviously all things you would have had to do - not that they could dictate.

Yes, all assets are considered marital assets - but there is no absolute law on calculating the division. So the things I mentioned above would have shown a judge what your intentions were. That could certainly be over ruled, especially if your circumstances changes (e.g. you went from being equal earners to one a SAHP to a disabled child. But a judge would consider it.

Pre nups aren’t legally binding, but if done properly are - according to everything I’ve read - becoming more likely to be considered. Again - they show clearly what the intentions of the parties were. There is no law that says assets split according a set percentage - so the judge is free to consider those documents.

The word "inheritance" is a red herring here.

Basically, the in laws had some money and gifted it to their son.

If the tried to ring fence if then it would not be a gift, it would be a gift with reservation, which brings its own problems.

So the next question is, having received the gift, could your husband ring fence it somehow? The answer is no, not if he has used if to purchase what is then the marital home. There is potential for spouses to ring fence assets in some circumstances, but only where they are not intermingled with marital assets not relied upon by the spouse, and even that depends on the length of the marriage and whether there are kids, his the kids'needs would be met etc. And it's all challengeable in a divorce.

The other option would be for the in laws to "buy into" your house. Then they would own that portion. They would always own that portion, but that has tax implications of course.

Spouses can own different proportions of a property than 50/50 but that doesn't really mean anything when you are married and it's a marital asset, which means it's owned equally anyway. Divorce laws impact on property ownership.

Thank you @VanGoghsDog!