Parents giving my partner and I £50 000 deposit... how do I safeguard this money?

StuC75

Whoa, was the post not made to the ' House Buying, Renting & Selling' board rather than the Relationships & Marriage thread? The OP was looking for practical advice on the financial side rather than Relationship side.

Theres every likelyhood that the OP's Partner isnt particularly fussed about the situation and may be grateful for the offer of the deposit.
Whats most relevent with this situation is what happens in the longer term. Does this investment form part of the parents estate or is it truly a present day gift to the daughter to use as needed.

Should the OP die does this money have to be repaid by her partner to the parents as he then brings up the children or does that interest pass to him.

Should the OP & Partner look to upsize in the future would the OP carry over this larger share to any other house they buy? or would the fact the partner had paid more to the mortgage over those years be reflective in his preceived stake at any time whatsoever..

I must admit that if I was in the OP's partners shoes, I would probably take the 'thanks but no thanks reply to such an offer'.

Would say gratefull for such an offer, but that would make such a step on own feet where enter it as True Equals 50/50 (regardless of who may pay the most to the mortgage as raising children and being committed together is the way it balances out). Mine/Yours & Yours/mine..

Why is renting seen as such a 'waste'.. would more likely Lose more money if bought somewhere together, split & had to sell on the property (if buyer got scent of a split being the cause).

The OP is working part time, even if they split, had the money from the deposit they would still be unlikely to be able to buy on somewhere else based on single earnings - as its the OP Partner that has the higher earnings for qualifying for the mortgage..

Dunroamin

StuC75 wrote: »

Whoa, was the post not made to the ' House Buying, Renting & Selling' board rather than the Relationships & Marriage thread? The OP was looking for practical advice on the financial side rather than Relationship side. .

A discussion of marriage is perfectly appropriate to the discussion as it concerns legal and financial matters.

redskyatnight_2

Dunroamin wrote: »

A discussion of marriage is perfectly appropriate to the discussion as it concerns legal and financial matters.

Agree. It's all related.

Kynthia

Dunroamin wrote: »

More fool the women for having children with men who don't care enough about them to want to marry them!

Maybe, or maybe some are committed couples who have chosen not to marry. Either way what annoys me is they then get slated for trying to financially protect themselves when they don't have the protection of marriage. Like the OP they are called cold-hearted and told they obviously don't view their relationship as long-term when that isn't the case.

OP - one way of protecting your parent's money is to have one of them as a part owner of your property and a trust deed specifying what percentage they own. That way they can view it as a long-term investment as their share will increase with any property value increases.

neverdespairgirl

lessonlearned wrote: »

I agree entirely. It is false economy.

However there are sadly some people who refuse to understand this and are convinced they can do better than the professionals.

........


Best advice from first class professionals doesn't come cheap but it does pay dividends.

As I said in an earlier post the rich hang onto their money by paying for best advice. Some people prefer to squander their money on non essentials and try to cut corners by going the DIY route.

I agree.

My OH, my Dad and I are all barristers, and all have properly-written wills by solicitors who know about wills and trusts - which we don't.

InMyDreams

For me the issue around whether or not to 'protect' the money isn't what bothers me.

It's that the OP has commented that she wants to protect *her parents' money* but wants to do it in a way that would mean she doesn't have to pay inheritance when they die.

Surely either the money is *hers* (and the issue to protect it is separate) or the money is *her parents'* in which case IHT (if over the threshold) should be payable on death. I take issue with her wanting to protect the money *because* it's her parents'. As if that somehow makes protecting it more acceptable.

As for the issue of protecting it from a partner at all, as a stay-at-home parent who has sacrificed a career to bring up our children myself, I totally empathise with the OP's views that her role is as important as her partner's and thus all income should be considered joint. But I think it goes both ways. If her partner suddenly got an unexpected promotion, bonus, won the lottery or whatever, that would be shared. Same with her windfall. They are a team. One family unit.

I can understand couples just starting out wanting to protect assets that pre-date their relationship, but once you've got to the stage where you are committed enough to be bringing up a child together and considering jointly owning property, then I think *all* income, however it's obtained, should be joint, *especially* if one parent is staying at home to provide childcare. So the real question is whether the OP's money is actually being given or whether the parents want to retain an interest (in which case they shouldn't be hiding it from IHT).

BitterAndTwisted

"I can understand couples just starting out wanting to protect assets that pre-date their relationship, but once you've got to the stage where you are committed enough to be bringing up a child together and considering jointly owning property, then I think *all* income, however it's obtained, should be joint, *especially* if one parent is staying at home to provide childcare".


Which is an entirely reasonable view. However, the courts often don't agree with you. One only has to read a few threads on this forum and over on the "Marriages/Relationships" one to discover the kind of penury an unmarried partner can find themselves in should their relationship break down when there is a jointly-owned property in the picture.

lessonlearned

BitterAndTwisted wrote: »

"I can understand couples just starting out wanting to protect assets that pre-date their relationship, but once you've got to the stage where you are committed enough to be bringing up a child together and considering jointly owning property, then I think *all* income, however it's obtained, should be joint, *especially* if one parent is staying at home to provide childcare".


Which is an entirely reasonable view. However, the courts often don't agree with you. One only has to read a few threads on this forum and over on the "Marriages/Relationships" one to discover the kind of penury an unmarried partner can find themselves in should their relationship break down when there is a jointly-owned property in the picture.

This is exactly the reason why co-habitees need to get these issues sorted out, preferably through legal channels.

There is no legal protection whatsoever for co-habitees, either side.

The standard property rights that appertain for marriage do not apply. The same with issues of guardianship and access.

There are no guaranteed rights of access to children, (fathers often find themselves in a very difficult situation in a break up) there are no grandparent's rights .

If, for whatever reason, the co-habitees do not marry then it is only sensible and practical that adequate provision in law is made.

It has nothing to do with "love" or "committment" or lack thereof.

Issues as serious as this should not be left to chance.

The issues around IHT are entirely a different matter. There are plenty of perfectly acceptable and legal ways of reducing IHT bills.

seriousDFW

InMyDreams wrote: »

For me the issue around whether or not to 'protect' the money isn't what bothers me.

It's that the OP has commented that she wants to protect *her parents' money* but wants to do it in a way that would mean she doesn't have to pay inheritance when they die.

Surely either the money is *hers* (and the issue to protect it is separate) or the money is *her parents'* in which case IHT (if over the threshold) should be payable on death. I take issue with her wanting to protect the money *because* it's her parents'. As if that somehow makes protecting it more acceptable.

As for the issue of protecting it from a partner at all, as a stay-at-home parent who has sacrificed a career to bring up our children myself, I totally empathise with the OP's views that her role is as important as her partner's and thus all income should be considered joint. But I think it goes both ways. If her partner suddenly got an unexpected promotion, bonus, won the lottery or whatever, that would be shared. Same with her windfall. They are a team. One family unit.

I can understand couples just starting out wanting to protect assets that pre-date their relationship, but once you've got to the stage where you are committed enough to be bringing up a child together and considering jointly owning property, then I think *all* income, however it's obtained, should be joint, *especially* if one parent is staying at home to provide childcare. So the real question is whether the OP's money is actually being given or whether the parents want to retain an interest (in which case they shouldn't be hiding it from IHT).

How lovely to read this balanced and rational response; thank you. I agree completely; a family unit involving either marriage or children should, in my opinion, be one unit where everybody goes all-in. I KNOW that others disagree, and feel that what 'belongs' to them ought to be protected. But to some of us, once we are married, money doesn't belong to us as an individual anymore, it belongs to the family unit. That's why I got married; I wanted to share everything, the good and the bad.

There is a lot of confusion in this situation which the OP does not want to or cannot recognise.

I also find the insistence that the money belongs to the parents, but that the OP wants to avoid IHT confusing.

I genuinely don't understand why a couple wouldn't get married if they want the so-called protections it offers? It doesn't have to be a religious affair, or expensive, or involve anyone else. No-one has to change their name.

I also don't understand the discussion about a woman wanting to get married but the man not proposing. Surely a woman could propose to a man? This wouldn't be beyond the realm of possibility? Or that the two people might discuss the issue and agree they both want to marry?

Daniel54

I speak as a parent helping his son ( no partner) with a deposit and will do the same for my daughter when she is ready.The OP is being sensible and clear headed,in my opinion,with nothing to explain.If there is any confusion,it lies within some of the comments.

The kind gift is understood by all involved to be for the sole purpose of buying a family home which would otherwise be unaffordable,so in this sense the OP has no discretion over how the money is to be spent and no lack of trust is involved.

To safegaurd the financial interests of their child and grandchild,the parents wish to ensure that if the partnership were to breakup,the gift would remain the property of the OP.This is no comment or slur on her partner, merely sensible "just in case" insurance with which he seems to be perfectly comfortable.

If the money is given as a gift then after seven years it will no longer form part of the parents ' estate for IHT purposes.If it is given in any other way eg as a zero interest loan,then it will continue to be part of the estate and the Chancellor will take his cut when the time comes .In this way the parents are able to give the OP money she would at some point inherit at a time when she most needs it and in a tax efficient way.all very understandable and sensible.

This is exactly how and why I will myself proceed and I wish the OP and her partner good luck in their house-hunting.