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    • elwez
    • By elwez 20th Mar 17, 9:56 PM
    • 3Posts
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    elwez
    Mortgages and family gifting
    • #1
    • 20th Mar 17, 9:56 PM
    Mortgages and family gifting 20th Mar 17 at 9:56 PM
    hey folks,

    Apologies if this is in the wrong area. Due to a death in our family my parents are looking to gift me and my brother some money. We've had a look around and understand the inheritance rules around the gift so we have a reasonable grasp on the implications. However my mother wants to add some conditions to the gift. The money is to be used for paying off part of my mortgage (when I'm out of the fixed term), is for my benefit only and that the sum of this gift must never be included in any marital or partnership joint assets. They've drawn up this doc themselves and I've no issues with the conditions. We're just wondering about the legality of this doc, could it be witnessed and signed by the bank manager when we are all together to sign it or would we need a trip to a solicitor to make the doc legal?

    Any advice is welcomed.
    Thanks,
    A
Page 1
    • AnotherJoe
    • By AnotherJoe 20th Mar 17, 11:59 PM
    • 7,237 Posts
    • 7,750 Thanks
    AnotherJoe
    • #2
    • 20th Mar 17, 11:59 PM
    • #2
    • 20th Mar 17, 11:59 PM
    IANAL but the requirement seems to be impossible to enforce without you creating "pre nups"should you ever get married or similar, and even then, AIUI, pre nups don't necessarily have any legal standing.

    So to actually enforce it, your mother might have to do something like be a "silent partner" in all future house purchases of yours , perhaps via a second charge, so as to keep a beady eye on "her" money.
    • getmore4less
    • By getmore4less 21st Mar 17, 6:48 AM
    • 29,787 Posts
    • 17,813 Thanks
    getmore4less
    • #3
    • 21st Mar 17, 6:48 AM
    • #3
    • 21st Mar 17, 6:48 AM
    if the death was less than 2 years ago they can avoid IHT issues over the next 7 years if there are any.


    in the current form unless you have a sole mortgage paying off part of that will benefit all those on the mortgage unless you also account for the savings in interest on the paid off bit.

    do the conditions have the money revert back to your parents if you try to circumvent the conditions, ie you have to will the money back to them so any partner cannot get the money when you dies.
    • Keep pedalling
    • By Keep pedalling 21st Mar 17, 9:24 AM
    • 3,575 Posts
    • 3,848 Thanks
    Keep pedalling
    • #4
    • 21st Mar 17, 9:24 AM
    • #4
    • 21st Mar 17, 9:24 AM
    There would be no obligation on you to stick to these frankly stupid conditions if this is really a gift. Once the money is yours you can do what you like with it.

    If they made it a loan they could certainly impose conditions, but a loan is not much use when it comes down to IHT planning.

    I would be rather miffed in your position, as it sounds like your mother has trust issues. I hope they have not made wills with similar nonsense in them.
    • foxy-stoat
    • By foxy-stoat 21st Mar 17, 11:01 AM
    • 1,561 Posts
    • 861 Thanks
    foxy-stoat
    • #5
    • 21st Mar 17, 11:01 AM
    • #5
    • 21st Mar 17, 11:01 AM
    hey folks,

    Apologies if this is in the wrong area. Due to a death in our family my parents are looking to gift me and my brother some money. We've had a look around and understand the inheritance rules around the gift so we have a reasonable grasp on the implications. However my mother wants to add some conditions to the gift. The money is to be used for paying off part of my mortgage (when I'm out of the fixed term), is for my benefit only and that the sum of this gift must never be included in any marital or partnership joint assets. They've drawn up this doc themselves and I've no issues with the conditions. We're just wondering about the legality of this doc, could it be witnessed and signed by the bank manager when we are all together to sign it or would we need a trip to a solicitor to make the doc legal?

    Any advice is welcomed.
    Thanks,
    A
    Originally posted by elwez

    Sign it in front of a solicitor if it makes them feel better, it will have no legal standing in the event you get married, have kids and you end up divorced and needed to split the assets.


    Say what you like to them, do whatever makes them happy.


    Good lucks
    • AnotherJoe
    • By AnotherJoe 21st Mar 17, 11:45 AM
    • 7,237 Posts
    • 7,750 Thanks
    AnotherJoe
    • #6
    • 21st Mar 17, 11:45 AM
    • #6
    • 21st Mar 17, 11:45 AM
    foxy-stoats suggestion seems like the most pragmatic, i'd try to avoid a solicitor though as if they are doing their job right they will point out this isnt enforceable and probably try to charge you a large amount for a complex and unwieldy trust arrangement. See if you can persuade your mother than its unnecessary to involve them for a simple document like this.

    Perhaps get the next door neighbour to witness rather than bank manager or solicitor, it so you dont involve anyone that knows what the actual situation is :-)

    Longer term, understand that your mother trying to enforce this at point of marriage or similar could cause serious rift with your (?future not on the scene yet?) partner.
    • Keep pedalling
    • By Keep pedalling 21st Mar 17, 12:48 PM
    • 3,575 Posts
    • 3,848 Thanks
    Keep pedalling
    • #7
    • 21st Mar 17, 12:48 PM
    • #7
    • 21st Mar 17, 12:48 PM
    The only problem with this approach, is that it could be storing up trouble for the future.

    This all seems to be coming from mother, so I would tackle father on the issue. Explain that you are perfectly happing to put the moneypaying the mortgage and you will do that but once that is done there is no way of you or them enforcing the second clause so the whole e resize is pointless. I would also point out that you are now adults and that your parents should have some faith in you both making sensible decisions in the future, rather than sign pointless and uninfircable agreements.

    Whatever you do do not let your control freak mother anywhere near a solicitor.
    • kingstreet
    • By kingstreet 21st Mar 17, 1:05 PM
    • 31,934 Posts
    • 17,066 Thanks
    kingstreet
    • #8
    • 21st Mar 17, 1:05 PM
    • #8
    • 21st Mar 17, 1:05 PM
    Later in life, you can use a Family Estate Plan to avoid possible spousal depradation but not that this time when/if there's going to be a mortgage involved.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • elwez
    • By elwez 21st Mar 17, 6:02 PM
    • 3 Posts
    • 0 Thanks
    elwez
    • #9
    • 21st Mar 17, 6:02 PM
    • #9
    • 21st Mar 17, 6:02 PM
    hey folks,

    Thanks for the answers, given me a couple different avenues of investigation and discussion topics.

    Shes just after some peace of mind for the future. A couple of messy divorces for various relations, so should i end up in a similar position she'd rather i dont end up visiting the cleaners like they did.

    thanks,
    A
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