It’s something a lot of parents don’t want to think about when they give their children financial support as they set out on married life, but what will happen to that money should the marriage end in divorce? Inspirational Magazine speaks to family law partner Karen Moores of Sydney Mitchell, to find out how parents can prepare for any eventuality.
The wedding of a child is one of the proudest moments of parenthood. As the father of the bride, or the doting mother, it’s a moment that tends to wobble even the stiffest of upper lips! Whether it is the first dance on the dance-floor that gets you or the moment the couple are pronounced man and wife, you have to be extremely austere not to be swept up in the joy and excitement of a wedding.
Naturally, no parent wants to think about the possibility of their child divorcing on this happy occasion. However, should the worst happen and the marriage does break down, it’s important that proper precautions are in place to ensure that any financial support you may have given your child is secured to benefit them, whatever the future holds. As the wedding car pulls away from the venue and the happy couple embark on their married life, careful precautions in the form of seeking the advice of a solicitor can ensure this is a time of hope and joy, and not a time for doubt, regret or concern.
Karen Moores is the family law partner at Sydney Mitchell Solicitors in Birmingham and her experience suggests that legal proceedings arising from argument over money given to children prior to a divorce are becoming more frequent:
I have noticed an increase in the number of cases involving other family members, generally parents, in proceedings which follow a relationship breakdown. When I was first in practice this was the exception and whilst it still does not occur in the majority of cases there is an increasingly significant minority of cases which involve the parents of one spouse or the other in the financial applications arising from a divorce.
As the outcomes of these proceedings can be uncertain and the process can be complicated, the advice is simple: to avoid the possibility of prolonged legal wranglings, it is important to seek out legal advice before advancing any financial assistance to family members.
As with many areas of law these types of difficulties can be avoided by taking legal advice before advancing the money and ensuring that agreements about the provision of the monies are set out in writing.
Many parents choose to support their children financially as they start out on their marital life or purchase their first home with a partner. Unfortunately there is often little consideration given to who is legally entitled to benefit from the monies if the relationship should break down.
When parents fail to take proper legal advice before giving children financial support the subsequent breakdown of a relationship can lead to tiring, stressful and expensive legal proceedings as Karen explains:
When monies are provided to children, or grandchildren, there is rarely a discussion about the terms on which the money is provided. All too commonly in these situations parents take the view that they are providing their child with the benefit of assistance. But it follows as a natural consequence that the child’s partner will also benefit. However if a parent was asked the direct question whether the money should be divided between the child and their partner if the relationship breaks down most will, understandably, answer “no”. It is not unreasonable to feel that the money is available to your child and not for distribution between them and their partner if it all goes wrong. But where there is no discussion and nothing put in writing this situation can all too often lead to the couple and one set of parents fighting over the money in front of a court.
When shares in the family business are involved the situation is even more complex with increased potential for issues to arise. Again it is not uncommon for a child or children to take an increasing role over time in a family business that may have been built up over many generations. Transfers of shares often then occur or they may be gifted for tax planning purposes. Again it is important to consider whether in fact the business interests should be tied into a trust to better protect shareholdings in the family company being taken into account by a court in the event of divorce.
To be secure in the knowledge that financial assistance benefits the person in your family that it is intended for, the best advice is that whenever gifts are being made from family monies you should take advice as to the best way to protect that for future generations should the worst occur? Sydney Mitchell has one of the largest specialist family law teams in Birmingham. If you require advice on any aspect of family breakdown or protection of assets for the future we have specialists at each of our offices in Birmingham City, Solihull and close to Birmingham airport.
For further information on this article or any family law matters, please contact Karen Moores on 0121 700 1400 or fill in our online enquiry form.
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