Hereโs a warning if youโre considering helping your child to buy their first home.
Law firm Brindley Twist Tafft & James has revealed it is seeing a rise in disputes relating to the Bank of Mum and Dad (Bomad).
The problem occurs if the child โ helped by Bomad funds โ buys a home with their spouse, and the couple later split up.
When the assets are being divided up, the ex-partner argues the funds were a gift, and as such, they donโt need to be repaid.
But the parents claim the funds were a loan and the ex should return them.
So what happens?
Courts tend to err in favour of funds being a gift โ unless documentation proves otherwise.
So, if youโre loaning your child money, seek legal advice and get a repayment agreement in writing. Also, discuss drawing up a โdeed of trustโ.*
๐๐ผ๐ฟ ๐บ๐ผ๐ฟ๐ฒ ๐ต๐ผ๐บ๐ฒ๐ฏ๐๐๐ถ๐ป๐ด ๐ฎ๐ฑ๐๐ถ๐ฐ๐ฒ, ๐ฐ๐ผ๐ป๐๐ฎ๐ฐ๐ ๐๐ ๐๐ผ๐ฑ๐ฎ๐.
*๐ง๐ต๐ถ๐ ๐ฎ๐ฟ๐๐ถ๐ฐ๐น๐ฒ ๐ฑ๐ผ๐ฒ๐ ๐ป๐ผ๐ ๐ฐ๐ผ๐ป๐๐๐ถ๐๐๐๐ฒ ๐น๐ฒ๐ด๐ฎ๐น ๐ฎ๐ฑ๐๐ถ๐ฐ๐ฒ.
