It is increasingly common for parents to give money to their children to help them buy a property or set up a new business. You may intend this purely as a gift to your child to help them with their new venture not appreciating that in the event of a separation or divorce, that gift may be “lost.”
How can you protect this money if your son or daughter subsequently divorces?
Loan or ownership: You can protect your investment in the new venture by either taking a share in the ownership or making a loan which may also then be protected by taking a charge. If you opt for ownership your advisers can ensure that you are registered as one of the co-owners in the appropriate proportion. So, for example, if you are contributing 30% of the purchase price for land or buildings, you can be registered as a co-owner (or one of the ‘tenant in common’) of the property with a declaration of trust which records your 30% interest and any other intentions.