Lending or gifting money to your child and their partner? Read this article…

With the ever-increasing cost of living and property prices it is increasingly common for parents to seek to assist their children in flying the nest and moving in with a partner.

But STOP….. what would happen if your child and their partner separate in the future? Is your money safeguarded or will it be shared between your child and their partner in any financial separation?

If you intend for the monies to be a loan, make sure a legally drafted agreement is entered into to protect the loan to include the repayment date, monthly contributions, if relevant, and interest. You need to address this from a commercial perspective.

If it is intended to be a gift, is this solely for your child’s benefit and would you want to ensure that they benefitted alone, if their relationship breaks down? If so, consider if a cohabitation agreement or nuptial agreement is sensible to protect everyone involved. If your child is intending to live with their partner, or living together (whether as a heterosexual or same sex couple), they can enter into a cohabitation agreement (sometimes called a living together agreement).

This can set out the ownership of existing assets (including property), what their financial responsibilities will be towards each other and how savings and jointly owned assets will be distributed should they later split up.

It is important to seek legal advice before providing any monies to your children. Please click here to contact a friendly and experienced member of our family law team to discuss what would happen to your money if your child separates from their partner and how to protect the capital.