How to safeguard a property

Tartlet

This is probably not in the right area of the forum but I can’t find anywhere better so apologies if it’s in wildly the wrong place.

I’d appreciate any advice as to how to safeguard a property which we stupidly gifted money to a grandson to purchase. Stupid in hindsight anyway and now that we’re aware of facts and circumstances which our family had been protecting us from.

The situation is this. It’s a sorry tale. Our grandson owns a house which we gifted him £135k to buy. It was intended to be our legacy to him and provide him with a place to call his own. Issues with his mother meant that he was being thrown out of the parental home at frequent intervals and the resultant stress and turmoil was doing no one any good. We took him in for a while and decided that the best option was a place of his own. No rent to pay just utiities and ongoing maintenance which we were prepared to help with.

At the time he was in full time employment and although I had a lot of qualms about putting the house in his name, I was persuaded by my husband that it was the best way to settle him. But fast forward 18 months and we’ve learned that he has a drug and alcohol problem, is saturated in debt and has defaulted on all utility bills and council tax. He’s been off sick with mental issues for months and has been borrowing hard to fund the drink and drugs. He’s in a real mess and simply doesn’t seem able to live a normal life.

We’re worried that the house is at risk of either debtor legal action or being used as collateral for further loans and are looking for ways to protect the property. Any ideas please?

Yes, I know we’ve been been extremely stupid.

Pennywise

Unfortunately a gift is a gift. If he bought the house in his name only, legally, there's nothing you can do.

If he's open and amenable to advice and realises he has problems and understands the consequences, he, himself,may have options to protect his home, but it's really up to him now.

BoGoF

You are 18 months too late to be thinking of this I'm afraid.

DoctorStrange

I think anything will have to be done with his cooperation.

If he accepts his issues and understands you're trying to look out for him, you may have some options.

However, if he's unwilling/unable to cooperate then I don't think there's much you can do to protect the value of your gift.

lincroft1710

The only way you could safeguard his home would be to pay off all his outstanding debts and I don't think any of the other posters on this thread would disagree that it would be a very bad idea

Cook_County

Did you take professional advice from a solicitor or an accountant when you made the gift or bought the property? If so, did they discuss the risks with you at the start?

Tartlet

I obviously didn’t make it clear that we were are wanting to safeguard the property for him in the hopes that he can turn his life around at some point. We are not trying to do anything without his cooperation.

We were aware of the potential general risks but unaware of his personal circumstances which would have course heightened those risks enormously. My husband and I were at odds over the ownership of the house at the time of purchase but I conceded to him.

lincroft1710

You can as I previously suggested, pay off all his outstanding debts.

But in hindsight, until the mental health, drug and alcohol abuse problems are sorted, in a few months time he'll be back in debt again.

There are debt management schemes and would suggest you visit the Debt Free Wannabe board

Mojisola

Tartlet wrote: »

My husband and I were at odds over the ownership of the house at the time of purchase but I conceded to him.

Has he apologised and admitted you were right?

kinger101

Tartlet wrote: »

I obviously didn’t make it clear that we were are wanting to safeguard the property for him in the hopes that he can turn his life around at some point. We are not trying to do anything without his cooperation.

I know this is very hard, but you should not shield him from the consequences of his addition. This will just make it less likely that he'll seek the professional help he needs to tackle his problem. Helping an addict in this way is often described as enabling.

It's likely that the only thing you can do is be there for him if and when he decides to turn his life around. But he'll never reach that tipping point if you pay his debts.

00ec25

your emphasis seems to be on securing the money you gave him which has now been converted into a property in his sole name

you only option is to retrospectively try to get him to agree that the money was not a gift, but was instead a loan which will be repaid on either him selling up, or him dying.
That does of course mean the money is still in your estate for inheritance tax purposes when you die. You need to balance that risk against the risk he is forced to sell his house and the money vanishes that way

to retrospectively concert a gift into a loan, and then secure that loan by you taking a charge (registered with land registry) against the property is not something you can do unilaterally. He would need to agree to it.

Presumably you would not want the loan to carry an interest charge, so no tax implications for its repayment.