Could a gifted house deposit be considered part of an estate?

Yorkshireman99

Ergates wrote: »

I'll clarify my questions - I didn't put them very well in the first post:

1) Normally, if a husband and wife are joint tenants, then his share would pass to her automatically on his death and wouldn't be considered part of his estate (and thus is safe from his creditors). However, could this still be the case if they're only part owners of the house?

2) Is it possible that, via some gift with reservation type thing, the could be considered to own the *whole* house (because they live there) despite only having contributed the deposit (say 35%). Worst case scenario, could his estate be considered to own 50% of the property even though his portion of the deposit was only 17.5%?

I'm not concerned about what the lenders will or won't do at the moment - that's for another day.

The situation regarding the lenders cannot be sensibly ignored. It is critical to the proposed scheme. Re-reading the thread just emphasises to me how ill advised you would be to get involved at all. To be blunt don.t touch it with a very long barge pole.

-taff

As far as his debts are concerned, what does he intend to do about them? As above, if he goes bankrupt and he own a share of the house, they will come after that share.If he gifts you money to buy the house, that could be seen as an assett, and they will come after you for that too.
This would be very messy.

Malthusian

Ergates wrote: »

No, the entire purpose is to enable the in-laws to be able to move near to us.

No, if that was the purpose they would sell the house, pay off the debts (assuming it makes financial sense to do so) and rent somewhere near to you out of whatever capital or income was left over.

It has literally nothing to do with moving closer to you. The purpose of the arrangement is not to move closer to you, the purpose of moving closer to you is to justify the arrangement. They couldn't justify this idea of you using their creditors' money to buy a house for them to live in if they were staying where they are now.

As others have adequately covered, it probably won't work and you shouldn't touch it with a bargepole.

Paul_DNAP

Just to say, another vote for the "don't touch it with a bargepole" solution. You really don't want to get your financial affairs tangled up with someone who has an undisclosed amount of debt. I suspect the reason it is undiscolsed is becasue it is large, cerainly large enough to be thinking of ways of not losing his house over them.


Don't allow them to pay the deposit (even if they give you the money to pay the deposit, it may still be considered a joint asset). If you want to buy a house for them near you then make sure it is 100% your own house on a proper buy-to-let mortgage and your in-laws are your tenants pure and simple (with all the correct landlord paperwork in place) and as such their background finances are none of your business beyond their ability to pay you rent (which they can do from their capital).


Then if their debts do catch up with them and they can't afford the rent anymore, you can become a beneavolent landlord and allow them to occupy rent free to be sure your in-laws don't end up on the street.

konark

You say that your in-laws are selling THEIR house. If this is in both their names only half the deposit will come from the father in law.



The OP is worried about the fall-out at the FiL's death, but it would be difficult for creditors to get their hands on the (half)deposit in this case.


It is probably more likely that he will be made bankrupt. If he can avoid this for 5 years that would make it more difficult for anyone to unravel the deal.


At the end of the day it depends who he owes the money to and how much they will pursue it

Malthusian

konark wrote: »

It is probably more likely that he will be made bankrupt. If he can avoid this for 5 years that would make it more difficult for anyone to unravel the deal.

If there was no chance of him being made bankrupt in the next 5 years the FIL wouldn't be proposing this mad scheme. The whole point is to go bankrupt while still hanging on to the house he lives in.

I also consider it unlikely that he will put all his energy into staving off bankruptcy for five years for the OP's sake. He has nothing to lose, he already has no money, and he is unreliable enough to run up nearly six figures worth of unsecured debt. If they consent to his scheme, the OP and their partner are the ones who stand to lose out from the FIL's bankruptcy.

Ergates

Thanks to all of you who shared your thoughts.