Protecting my parents investment property in a divorce

locotoro

Hi all,

I actually trying to get information on behalf of a friend. His parents own a property which is rented out - although it is in his name. They bought it possibly 30 years ago and when they decided to upscale they asked their son (married at the time) to take out a mortgage on the property as they were not able to due to age and bad credit.

Now the son is experiencing difficulties in his marriage and he wants to ensure that the property is protected in the event of a divorce.

The couple and kids currently live with his parents and she doesn't work (never has).

Would an equitable trust be appropriate in this situation - what other alternatives does he have open to him?

Gigglepig

So technically, it is your friend's property (his name is on the deeds and on the mortgage)? How long has he been married?

Browntoa

should have been sorted at the time....too late now

Thegirl

If the house is in his name then it's his house.
If he has been married for some time then it will be classed as an asset of the marriage. Very difficult to do anything with it without being seen as disposing of a marital asset.

neverdespairgirl

Friend needs proper legal advice. It might well be that son holds it in trust for his parents - but htere are real difficulties here.

Rottensocks

And I take it that this friend doesn't trust his wife to be agreeable about finances?

Obviously, if she knows about the flat, and is a decent human being, there's no real problem....

Gigglepig

Rottensocks wrote: »

And I take it that this friend doesn't trust his wife to be agreeable about finances?

Obviously, if she knows about the flat, and is a decent human being, there's no real problem....

Even if she knows where the money came from orignally, it sounds like the son has treated the flat as his own (on the deeds, lived there, and mortgage in his name), so she might consider it the marital home too.

When the son took out the mortgage in his name, was it paid by the parents or did the son also make payments towards the mortgage?
Did the parents pay and do all the maintenance etc on the house?
Did the son and his wife pay "rent"?

Rottensocks

Gigglepig wrote: »

Even if she knows where the money came from orignally, it sounds like the son has treated the flat as his own (on the deeds, lived there, and mortgage in his name), so she might consider it the marital home too.

When the son took out the mortgage in his name, was it paid by the parents or did the son also make payments towards the mortgage?
Did the parents pay and do all the maintenance etc on the house?
Did the son and his wife pay "rent"?

Good points....
So, if it were counted as a marital asset, I suppose son relies on being able to provide real compelling evidence that shows he's not benefitted from the rpoperty at all?

A: would son be able to show that all mortgage deposit and payments were made by the parents?
B: Has the flat ever been the 'marital home' to son and his wife?
C: Would son be able to show that his parents collected all the rent from the property, not him?

I'm making the assumption that if the couple and their kids live with his parents, that there isn't any other proprty to split...which I suppose makes it all the more likely the wife might 'go' for a share of this flat?

neverdespairgirl

He needs legal advice.

zzzLazyDaisy

The starting point is that it is HIS house. His name is on the deeds and the mortgage is in his name.

What do you mean 'when they decided to upscale'? Do you mean that he took a mortgage on the property to release money which he gave to them in return for putting the house into his name?

He *might* be able to show that while he is the legal owner, the parents are the beneficial owners. But I suspect he will have difficulties. You say the house is rented out. Presumably as he is the legal owner of the house, he is also the landlord? So he will have been declaring the rent to HMRC on his tax return?

It looks like a sale (possibly at an undervalue?) from parent to son. In which case it is a marital asset and will fall into the pot to be distributed unless he can persuade the wife otherwise.

As neverdespairgirl says - he needs independent legal advice.

rpc

locotoro wrote: »

His parents own a property which is rented out - although it is in his name

You do not own things in someone else's name. The land registry records ownership and if that says son is the owner then it will be very hard to prove otherwise.

Was this transfer documented at the time?

If you put it into trust now, that doesn't mean that the value will be excluded from the divorce settlement. It might, it might not.

Your friend (it's always a friend) needs advice from a good solicitor, not a bunch of random people on a forum.