Question: My husband is buying a house with his sister as an investment. Her marriage is a bit rocky and we worry that her husband will want a share of the house if they divorce. What can we do?
Answer: In divorce, the sharing principle applies to matrimonial capital assets. Usually they get shared equally. The investment property that your husband and his sister are buying would not be classed as a matrimonial asset and so the sharing principle won't apply unless it is necessary to "invade" that property to achieve a fair outcome in any divorce proceedings between your sister-in-law and her husband. So, a lot depends on the value of the assets that she and her husband own.
If the matrimonial asset base is large enough, the non-matrimonial assets which would include the investment property will be left alone. Assuming that the court will not ignore the investment property, the best solution would be for it to be purchased in your husband's sole name, but that might be risky for your sister-in-law.
An alternative might be for a trust to be set up to buy the property, but that could have adverse tax consequences. This is a complex area so make sure your husband and his sister get good independent legal advice.
What's your problem?
If you have a question for Fiona McNulty, email email@example.com. We regret that questions cannot be answered individually.
These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.