Are you thinking of gifting your child and their partner a contribution towards their deposit?
It is not uncommon for parents to gift their children part or whole of...Back to News and Events
It is not uncommon for parents to gift their children part or whole of their house deposit to help them onto the property ladder. Naturally then, they will want to hold a beneficial interest in the property and protect their contribution from their child’s partner, especially as there is no certainty that they will stay together.
If you have considered, or have already decided that you are going to help your child and their partner with a house deposit, you need to make sure that, in the event that something goes wrong, you have taken the necessary steps to protect your interest in the property. A hassle free way to do this would be to create a declaration of trust between your child, their partner and yourself.
An example scenario would be:
What happens to your £50,000?
If you had no declaration of trust in place, you would simply have no automatic right to your money and neither would your daughter. In most situations the proceeds of sale are simply split 50/50 between the couple. This would result in you loosing thousands of pounds. By putting a declaration of trust in place you are safeguarding your financial interest in the property and ensuring that, should anything happen, you get your money back.
For example, in relation to the sale proceeds of the property, the declaration of trust would stipulate that:
What if they’re married and get divorced?
If the couple marry and get divorced then circumstances could change and it would be left to the divorce courts to decide how the money is split. However, having a declaration of trust in place would be an advantage in this situation, as it would be used in the courts as a persuasive argument.
If you feel that you need to protect your interests and want that added peace of mind, then call Poole Alcock today at any of our Cheshire based offices. Our team of friendly specialist solicitors are happy to help.
As the old saying goes, it’s better to be safe than sorry!