Giving your married child a down payment, then divorce

[Anonymous]

Anonymous wrote:Don’t listen to unhelpful PPs OP. I understand your question and had same one when my parents gave me and my DH money for down payment. I didn’t find a proper answer (didn’t look very hard). But I sat down DH and made it clear that if we divorce I consider that down payment as my inheritance and not communal property. Yes, yes I know what everyone thinks, but we are a good couple and if we divorce it will most likely be consensual (if it is not I know I can sit on any promise).

Anyway, just to say that I think it is a very fair question and I hope someone has a good answer for you

Hah. Good luck with that if you ever get divorced.

[Anonymous]

For the PP saying she sat down DH and made it clear ... doesn't matter. Whatever you said, whatever you want .... doesn't matter. If by chance you were to divorce, none of what you said matters. Legal matters. That's all.

[Anonymous]

Buy the house yourself and put your kid on the title -- not the spouse.

Or you finance the house and 'rent' it to the kid. Then you can turn it over in the advent of a divorce.

But otherwise I don't believe you can?

[Anonymous]

Anonymous wrote:Whoa, are there red flags and you’re expecting divorce?

My parents wrote a check to both of us. It was a gift. 15 years later if we divorced, we’d split the equity equally including the gift money. You can’t keep score in a healthy marriage.

This approach depends on the amount of the gift. If the parents wanted to give their child 500k to help with a down payment, do you think they would be comfortable with the spouse getting 250k if they divorced? Do you think your parents would be okay with this?

Obviously no one wishes for a divorce, but divorces are unpredictable. If someone thought they would get divorced, they wouldn’t marry in the first place.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Don’t listen to unhelpful PPs OP. I understand your question and had same one when my parents gave me and my DH money for down payment. I didn’t find a proper answer (didn’t look very hard). But I sat down DH and made it clear that if we divorce I consider that down payment as my inheritance and not communal property. Yes, yes I know what everyone thinks, but we are a good couple and if we divorce it will most likely be consensual (if it is not I know I can sit on any promise).

Anyway, just to say that I think it is a very fair question and I hope someone has a good answer for you

Hah. Good luck with that if you ever get divorced.

Coming to a mutual, verbal understanding while the marriage is intact has no grounds in a legal divorce battle. The OP question is how do you protect a gift to your child to be used by the married couple but shield it from the spouse IF they divorced.

[Anonymous]

Anonymous wrote:If you are giving them 20%, then put your name on the title

OP here. Please Walk me through how this is treated if three adults are on the title.

[Anonymous]

Anonymous wrote:Don’t listen to unhelpful PPs OP. I understand your question and had same one when my parents gave me and my DH money for down payment. I didn’t find a proper answer (didn’t look very hard). But I sat down DH and made it clear that if we divorce I consider that down payment as my inheritance and not communal property. Yes, yes I know what everyone thinks, but we are a good couple and if we divorce it will most likely be consensual (if it is not I know I can sit on any promise).

Anyway, just to say that I think it is a very fair question and I hope someone has a good answer for you

This may shock you, but pretty much EVERYONE thinks they are a good couple when they marry their spouse. People don't marry thinking, "well, that person's gonna cheat on me with a woman 15 years my junior and then try to take the house".

[Anonymous]

Anonymous wrote:Gift given before marriage will not enter into the community property of the married couple. Therefore, give the gift before marriage or make them do a prenup.

OP here.

So if a large financial gift from family should have been gifted before a marriage. But doesn’t any premarital gift that becomes commingled such as by buying a house become community property?

[Anonymous]

My parents helped us with a down payment when we were engaged and DH and I had an agreement that if we broke-up and sold the place that I would be paid the amount of my parents gift and then we would split the rest. We just typed up the agreement and both signed it. Years later after we were married my parents helped us with our second home and we didn't think about any of this. In fact to avoid gift tax issues my parent wrote both me and DH separate checks. Of course our marriage is very stable so no real concern.

[Anonymous]

Anonymous wrote:

Anonymous wrote:It's a gift. What they do with it once it's given is none of your business.

If you aren't comfortable letting it be a gift, don't give it. Don't attach strings to gifts.

It's a gift to one party (their child) but not to the couple.

Once their child commingles the gift money with marital joint funds, it becomes joint property.

Here's a potential option. Why don't you give your child the money that they can keep in a separate individual savings account. Let's say this amount is $500k. The couple can borrow against that money - let's say $400k - and can apply that money to a downpayment. Your child can use the remaining $100k to make the interest payments on the loan. In the event of divorce, the loan would need to paid back into the individual savings account which is owned by your child. Not sure if that would work but just an idea.

[Anonymous]

Anonymous wrote:It's a gift. What they do with it once it's given is none of your business.

If you aren't comfortable letting it be a gift, don't give it. Don't attach strings to gifts.

I’m sure they would both want this financial gift/assistance. They wouldn’t be able to afford a house otherwise (where they want to live).

[Anonymous]

Anonymous wrote:

Anonymous wrote:Don’t listen to unhelpful PPs OP. I understand your question and had same one when my parents gave me and my DH money for down payment. I didn’t find a proper answer (didn’t look very hard). But I sat down DH and made it clear that if we divorce I consider that down payment as my inheritance and not communal property. Yes, yes I know what everyone thinks, but we are a good couple and if we divorce it will most likely be consensual (if it is not I know I can sit on any promise).

Anyway, just to say that I think it is a very fair question and I hope someone has a good answer for you

Hah. Good luck with that if you ever get divorced.

+1 I am laughing that you think this “promise” is somehow legally enforceable or something your DH would willingly give up upon divorce.

[Anonymous]

Community property rights uou SOB!!

[Anonymous]

OP, I understand your concern but trying to maximize advantage to a sad, and hopefully unlikely outcome is soul sucking. It leads down an ugly path. Don't be that person. The person spreading bad karma, otherwise your DD and spouse should be keeping you at arm's length. Don't gift more than you're comfortable. You could always gift to your DD in yearly increments, and she could then choose, or not, to pay down the mortgage.

[Anonymous]

Anonymous wrote:My parents helped us with a down payment when we were engaged and DH and I had an agreement that if we broke-up and sold the place that I would be paid the amount of my parents gift and then we would split the rest. We just typed up the agreement and both signed it. Years later after we were married my parents helped us with our second home and we didn't think about any of this. In fact to avoid gift tax issues my parent wrote both me and DH separate checks. Of course our marriage is very stable so no real concern.

Marriages are stable, until they’re not