Giving your married child a down payment, then divorce

[Anonymous]

I totally agree with you protecting the money, OP. If there is no legal way to do it, I would not do it, because when they divorce, your child would lose out. And to a PP- I would absolutely announce that in front of a crowd.

[Anonymous]

Anonymous wrote:You are the type of in-law that comedy or horror movies are based upon.

If you won't admit what you are doing during your reception toast delivered in front of both families, that should tell you something.

Your bank account is probably huge but your heart sounds very small and sad.

Totally disagree. You can care and love a son in-law but still hold your daughter’s best interests above that of the son in law. Things happen:

- son in law cheats
- son in law does drugs, gambles, stops working voluntarily - all things to deplete the marital assets
- son in law treats wife poorly
- daughter dies, son in law remarries and leaves house to new wife (your grandkids got Zero)
- son in law takes penalty and drains 529s for himself

There are many things that can happen. Ensuring the money doesn’t go where you won’t want it to is prudent and realistic.

[Anonymous]

It is not that critics think divorce can’t happen . It us just that gifts should not come with strings. This is a family occasion not a business transaction. She is an adult forming her own nuclear family. The gift is a down payment on her judgement. It us based on hope and could be lost, but it is an investment in this couple’s future. It will make her think you believe in them long term if you take the risk. If it does not pan out, it won’t be because the in-laws weren’t all in. She us not a child that you are loaning the money to. She is an adult deciding to form a legal union, and you want to set them up for every success. Let go if the money and care about the people.

[Anonymous]

Some gifts or bequests do come with strings. Decline the money, I’d you don’t like them. These strings are absolutely reasonable.

[Anonymous]

Anonymous wrote:It is not that critics think divorce can’t happen . It us just that gifts should not come with strings. This is a family occasion not a business transaction. She is an adult forming her own nuclear family. The gift is a down payment on her judgement. It us based on hope and could be lost, but it is an investment in this couple’s future. It will make her think you believe in them long term if you take the risk. If it does not pan out, it won’t be because the in-laws weren’t all in. She us not a child that you are loaning the money to. She is an adult deciding to form a legal union, and you want to set them up for every success. Let go if the money and care about the people.

If daughter doesn't want the strings, she should act like an adult and pay for the house herself.

[Anonymous]

Anonymous wrote:What a toxic, controlling attitude. A gift is a gift. You should never give anybody money if you're going to get upset over what choices are made after the money leaves your hands. Save yourself and your child the grief.

Nope, there are a ton of legal mechanisms to prevent exactly this.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You are the type of in-law that comedy or horror movies are based upon.

If you won't admit what you are doing during your reception toast delivered in front of both families, that should tell you something.

Your bank account is probably huge but your heart sounds very small and sad.

Totally disagree. You can care and love a son in-law but still hold your daughter’s best interests above that of the son in law. Things happen:

- son in law cheats
- son in law does drugs, gambles, stops working voluntarily - all things to deplete the marital assets
- son in law treats wife poorly
- daughter dies, son in law remarries and leaves house to new wife (your grandkids got Zero)
- son in law takes penalty and drains 529s for himself

There are many things that can happen. Ensuring the money doesn’t go where you won’t want it to is prudent and realistic.

I agree with this PP. And I've seen these scenarios over and over again. If a divorce does happen, the same parents will often have to help out. Financial issues always ensue. The OP is ABSOLUTELY CORRECT to consider options.

[Anonymous]

Op, the damage you will do will be priceless

Sure your DC would end up with less money, if DC were to divorce. Sure. And it wouldn't be "fair".

But you injecting yourself into their marriage is far worse than your DC going forward with less money post divorce, if divorce should happen.

[Anonymous]

Anonymous wrote:It is not that critics think divorce can’t happen . It us just that gifts should not come with strings. This is a family occasion not a business transaction. She is an adult forming her own nuclear family. The gift is a down payment on her judgement. It us based on hope and could be lost, but it is an investment in this couple’s future. It will make her think you believe in them long term if you take the risk. If it does not pan out, it won’t be because the in-laws weren’t all in. She us not a child that you are loaning the money to. She is an adult deciding to form a legal union, and you want to set them up for every success. Let go if the money and care about the people.

These are not strings . The money is an investment, a financial vehicle, not a gift. It's important to protect everyone's interest. That's also why there are pre nups.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’m a divorce lawyer. You’re very smart to consider this. Under DC law, property acquired during the marriage by a gift to one party remains that party’s separate property so long as she can trace it out. That means you can’t say things like, “This is for both of you.” You make it clear it is a gift to just your child. Your kid then doesn’t do anything to make it a gift to the marriage (ex. by writing a note “I know you’re uncomfortable with the fact that my parents gave US the down payment but this house is OURS). Keep good records bc if you die, you’re not around to say what your intentions was with the gift.

Documenting the intention that the gift is for my child
is enough?

Thanks.

Yes, it is about sourcing the $$. It has to have an explicit trail and documention. But why assume....it's work to figure it out in a divorce. Get it in writing.

[Anonymous]

Anonymous wrote: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?

Of course she can. It's a business transaction.

[Anonymous]

Anonymous wrote:If you have given or plan to give a down payment to your child(ren) who are already married, how do you protect your gift from being taken by the spouse if they get divorced in the future? The house becomes a community property from my understanding.

Do you structure the gift as an interest-free loan that is due upon divorce?
Do you make them sign a post-nup?

We are located in DC, if that makes a difference regarding laws.

Wow, the confidence you show in your children is overwhelming. If you give a gift, it's just that.

[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.

Why are you still relying on Mommy and Daddy to do the things you should be doing for yourselves?

[Anonymous]

Anonymous wrote:

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.

We did it. We own 1/3 of the house. The mortgage payers can claim the interest on taxes. They pay the mortgage. Upon death, it is theirs . Or, if they sell, my part is returned, or they can refinance and buy me out.
What your intentions are regarding a divorce, have more to do with what you decide.
Spouse can just leave
Spouse can buy everyone out
House sells, and my $$ is returned, they split the rest .

[Anonymous]

Anonymous wrote:What a toxic, controlling attitude. A gift is a gift. You should never give anybody money if you're going to get upset over what choices are made after the money leaves your hands. Save yourself and your child the grief.

It's NOT A GIFT. It is a business transaction. People need to understand that buying property is, in fact, a business transaction. Think of it as buying stock in a company.

A Kate Spade purse is a gift. This is a tool. That's all. Not a gift.