Loan agreement with parents

cashbackproblems

Hi all


I am in the process of buying a property and should exchange in the coming weeks. As part of the purchase which I am buying myself I was given 45k as a gift towards the deposit by my parents. They don't expect this back necessarily, but would like to protect this amount from a future divorce (im currently single), and If I sold under those circumstances I would like them to get the 45k back.


Is there a cheap and easy way I can legally set this up? Is there such a thing as a loan agreement which would give them rights to that money back? As I said they would only want this back for my benefit in a divorce settlement.


thanks

glentoran99

What did you tell the mortgage company the 45k was?

ThePants999

I'm sure the mortgage lender were told it was a gift, and it was, that's all fine.

OP, I'm not really convinced you need anything here. It's not the case that as soon as you get married, half your assets become your spouse's. If you have a relatively short marriage (which I think typically means less than 5 years) with no children, the courts typically work on the principle of restoring both parties to their pre-marriage positions, which in your case would mean the house being yours. If you have a long marriage, your spouse will accrue a beneficial interest in the house by contributing to it - but it's highly likely that said contributions will mean you wind up with more than a £45K share anyway, which you can then give back to your parents if you like. And if you have kids, you'll find yourself caring primarily about ensuring they're provided for

ThePants999

You WOULD want to do something if you transferred the property into your spouse's name as well as your own. The key thing here would simply be not to transfer it into a joint tenancy - make sure you become tenants in common, with a declaration of trust that properly reflects how you want to split it.

gettingtheresometime

ThePants999 wrote: »

I'm sure the mortgage lender were told it was a gift, and it was, that's all fine.

OP, I'm not really convinced you need anything here. It's not the case that as soon as you get married, half your assets become your spouse's. If you have a relatively short marriage (which I think typically means less than 5 years) with no children, the courts typically work on the principle of restoring both parties to their pre-marriage positions, which in your case would mean the house being yours. If you have a long marriage, your spouse will accrue a beneficial interest in the house by contributing to it - but it's highly likely that said contributions will mean you wind up with more than a £45K share anyway, which you can then give back to your parents if you like. And if you have kids, you'll find yourself caring primarily about ensuring they're provided for

Forget divorce what about death?

Unfortunately death doesn't come after a long marriage - it could happen days or months after a marriage and unless the whole situation is handled correctly, the OPs partner could walk off with a property that may have had a huge %age paid for by the parents in law

BLOW_FLY

OP, what about a prenup?

Everything could be detailed and set out in that.


BF

sparky130a

cashbackproblems wrote: »

Is there a cheap and easy way I can legally set this up? Is there such a thing as a loan agreement which would give them rights to that money back? As I said they would only want this back for my benefit in a divorce settlement.

Yes. Don't get married.

Whilst you're at it don't ever cross a road either. Or eat fish. Ever.

Pre-nuptials are not as an entity recognised by British courts.

getmore4less

It was gift so no need for any agreement between you and them as you can just give it back when you want.

A will would be handy so they get it back should you die.

Any agreement with parents would be useless if someone else is grabbing the asset, you need the agreement with those people.

Oakdene

Im sure you can get it written that when the deposit only becomes repayable upon sale of the house due to seperation.

TBagpuss

You could have a charge drawn up which provided that your parents were entitled to £45K (or the relevant %) upon sale of the property and after payment of the mortgage.

Alternatively, you can ensure that you have a cohabitation agreement or pre-nup in place if and when you start to live with a partner, or if you do plan to get married, and at that point can discuss with your partner your respective attitudes and expectations in relation to financial matters more broadly.

As a previous poster mentioned, it would also be sensible to make or update your will.

davidmcn

TBagpuss wrote: »

You could have a charge drawn up which provided that your parents were entitled to £45K (or the relevant %) upon sale of the property and after payment of the mortgage.

But not if you've told the first chargeholder that the parents' money was a gift and that they wouldn't have any interest in the property!