Inlaws & Early Inheritance Question

Ultracheap

Advice

Hello I wonder if you can advise.

Me and my wife of have been together for 10 years and legally married for 5.
We are struggling to get on the property ladder we have 3 young children.
My father in law has agreed to release £100000 of my wife's inheritance to her now so she can use it with we me to get a home, providing I agree and sign a legal document he will have drafted that states in the event of a divorce she will always get back the first £100000 of any asset settlement plus half of the difference. For example say we had a £300000 home and divorced she would get £200000 and I £100000 and so on effectively securing her inherentance.
I understand where he is coming from and don't have a issue I just want what's best for us as a family but at the same time do not know the law and need advice if this is legal and any potential pitfalls?

Any advice would be greatly received.:A

Thankyou

Sambella

The very fact that you have come on here suggests that you are uneasy with this.

I wouldn't sign it.

It would be up to your wife to argue this during divorce proceedings ( if it comes to that)and then the courts will decide. If she keeps the kids she may well get a bigger divorce settlement than you unless you agree things. Between yourselves.

If you don't agree to this it may well cause disharmony in the family.

There are also other possibilities to consider. What if the parents die within the next seven years and IHT tax has to be paid?

Trust your instincts.

mvteng

I don't understand why you wouldn't sign it.


You & your family are basically getting a gift of £100k. You should be 100% grateful

Sambella

Mind you. If you don't get divorced and your wife dies before It's all yours!! Because it's a JOINT asset regardless of who funded what.

Unless father in law wants it back..... lol

davidmcn

Parents can't dictate what happens in their children's hypothetical future divorces - you and your wife can sign an agreement along those lines if you like, wave it at your FIL, and then rip it up once his back is turned. I suspect it wouldn't necessarily be enforceable anyway, it will depend what other contributions you and your wife make towards the property.

missbiggles1

He isn't "releasing inheritance", he's giving you money.

AnotherJoe

I dont understand those people who say "dont sign it". Did you want a house?

Its also perfectly possible for him to protect it better than he has done, but anyway, what he is asking for seems perfectly reasonable to me, if you wanted to challenge it, then cross that bridge after a divorce, not before !!

In any case whats your plan if you dont sign it other than REALLY annoying your wife and continuing to live in rented accommodation probably at a higher cost than a mortgage would be?

robber2

Have you considered the consequences of either of your in laws going into care, if they have to pay for this its quite possible that you will be forced into paying the £100k back which could result in you losing your house. I'd feel very uneasy about this if I was in your position. Of course we dont know your FILs circumstances, he may have many millions in which case the above would probably not apply.

good luck

Sambella

AnotherJoe wrote: »

I dont understand those people who say "dont sign it". Did you want a house?

Its also perfectly possible for him to protect it better than he has done, but anyway, what he is asking for seems perfectly reasonable to me, if you wanted to challenge it, then cross that bridge after a divorce, not before !!

In any case whats your plan if you dont sign it other than REALLY annoying your wife and continuing to live in rented accommodation probably at a higher cost than a mortgage would be?

I am one of those people.

If he doesn't sign it, they don't get to buy house? Isn't that some kind blackmail?

missbiggles1

Sambella wrote: »

I am one of those people.

If he doesn't sign it, they don't get to buy house? Isn't that some kind blackmail?

No - simple cause and effect.

AnotherJoe

Sambella wrote: »

I am one of those people.

If he doesn't sign it, they don't get to buy house? Isn't that some kind blackmail?

No, its not blackmail. Look at it from another perspective, all the FIL is doing is, instead of leaving £100k in will to wife, is giving it to her now.
FIL wishes to leave £100k to OP's wife, not the OP. Thats his right. He's just doing it before he dies and making sure that happens rather than half goes to SIL.

What the wife does with it afterwards is her perogative, for example she could, if she wished, after a divorce and she's got her 200k (as per the OPs example) give £50k to the OP. Seems unlikely though :-)

I have a similar situation but resolved it (IMO) better, by retaining the £100k (using this example) as mine, its an open ended loan not needing repayment until the house is sold.