Question: My parents paid a deposit of £25,000 on my house five years ago to help me on to the property ladder. My girlfriend moved in with me last year and we plan to marry next summer. My dad is insisting we get a pre-nup agreement sorted to keep their money "in the family". Surely we don’t need this as the house is in my name only and I pay the mortgage? I really don’t want to have this kind of discussion with my girlfriend - it’s awkward.
Answer: I realise that it may be tricky and awkward but do try to get a pre-nuptial agreement in place before you marry because though it is not guaranteed to keep the money in your hands, it will influence financial negotiations and ultimately any decision of the divorce courts.
Of course, your parents could consider registering a charge against your property in their own names but this is not a tax-efficient way of passing money on. It appears that the money is intended to be an outright gift and, quite understandably, your parents want to keep their hard-earned money on the right side of the family if you end up getting divorced.
Very few people realise the financial responsibilities created by marriage. At present your parents’ money is safe and the only way your girlfriend could claim a financial interest in your property is if she invested some of her own money into it. When you marry, your wife will potentially own half of your house, including your parents’ investment. Be honest with your girlfriend about the situation and do remember that you can always blame your parents.
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Fiona is a partner in the residential real estate team at Thring LLP www.thrings.com.