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Helping your kids onto the property ladder could find you in court.

Parents who help their children onto the property ladder could find themselves in court.

Parents who lend their children money to help them to buy a home can find it difficult to get their money back according to this growing trend.
In situations where a parent claims that money was made available as a loan, rather than a gift, and the child believes otherwise, the onus is on the parent to prove this if the case goes to court. As these discussions are frequently verbal and not always precise and thought through finding evidence can proving very hard for some people.

What can you do to protect yourself?

• Obtain independent legal advice before helping a child with a property purchase.
• If the intention is to lend money, draw up a formal loan agreement stating the amount of the repayments, the period of the loan and any interest that is to be paid.
• If the intention is to invest in the property, have a declaration of trust drawn up by a solicitor and ensure each party has independent legal advice on its contents before signing.
• Similar to a prenuptial agreement for marrying couples, a cohabitation agreement can stipulate the share of any assets acquired by an unmarried couple. Our family team can advise on this.
• Some lenders such as Nat West will accept repayable gifted deposits.

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