It is not unusual for parents to give extensive financial support to their children into their adult years. The property market shows no sign of slowing down and more and more parents are helping their children to get onto the property ladder. They will make funding available for businesses and sometimes simply want to see their children enjoy money within their own lifetimes.
If you are planning to give money to your children, whether by way of gift or loan, it is important that you have fully considered the implications of this.
Whilst many parents may be happy to gift their children money, they are often surprised when their children go through a separation and some of that money ends up with their child’s ex-partner.
If you are considering either gifting or loaning your children some money, we recommend that you seek legal advice. We are experienced in preparing loan agreements or declarations of trusts to ensure that your money is properly protected. You may also want to discuss the possibility of your child entering into a Pre-Nuptial or Post-Nuptial Agreement where the status of your money can be clearly recorded.
Prevention is a lot cheaper and much less stressful than trying to resolve a dispute at a later date. If there is a dispute you may find that you have to become an intervener in your child’s divorce which can have cost consequences for you.
It is important that your contribution is recognised and the terms upon which it was made available are properly recorded. If there are already divorce proceedings you may need to become an intervener in the divorce proceedings.
We work to ensure that any financial assistance that parents give to their adult children is properly documented and protected where necessary. We will discuss the appropriate way of doing this with you. If your child is not planning on getting married, they should consider entering into a Cohabitation Agreement.
There are often disputes in financial proceedings over where money has come from. You may need separate representation in negotiations or court proceedings. Please contact a member of our team to discuss your position and whether you need to become an intervener in court proceedings.
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