Protecting Your Assets
16th February 2010
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Protecting the assets while lending a helping hand

As recent reports suggest that the housing market is starting to look up, more and more homebuyers will be aiming to maximise the new movement on the market.

And without the baggage of being in a chain, first time buyers will be looking to hints of positivity on the market to make their first move onto the property ladder.

In an ideal world deposits would be sitting safely in the bank, but realistically as lenders continue to request a minimum of 10% deposit on mortgages, more and more first time buyers are turning to the bank of mum and dad to lend a helping hand.

The first thing on many parents’ minds  will be making sure that their children make a wise move, and if that means setting up home with their partner and the parent can lend a helping hand then the future looks rosy.

But what happens if things go wrong and the couple decides to separate? What would happen to your helping hand as a parent when the property gets divided between both parties?

According to Peter Lynn, the founding partner of SA1 law practice Peter Lynn and Partners, this situation is arising more frequently and is made trickier by the number of couples who choose to cohabit rather than marry which blurs the lines of entitlement.

With six highly qualified matrimonial lawyers, the team at Peter Lynn and Partners which includes one of only a handful of Welsh solicitors to sit on the Advanced Family Law Panel, have been involved in many high profile separation cases, business divorces and cases including asset portfolios worth millions.

Peter Lynn says: “It is estimated that there are around 2million cohabiting couples in the UK alone, who would be severely affected if they separated. In some instances individuals can end up penniless or homeless when they leave a long term relationship, while parental financial assistance can be even harder to prove.

“It is therefore not just married couples who should seek expert legal advice when they separate but cohabiting couples and any investors too. We are seeing more and more cases whereby parents lose out financially when their children separate from their partners, as money invested in the property to help them out is lost.

“We would recommend that parents should think hard about how they help their children and what the financial impact would be if the children were to split from their partners and the assets were to be contested. This isn’t meant to discourage parents from helping out but they should document what assistance has been given from the very start and outline what form it takes. 

“In a divorce setting, parents may find themselves being made a party to the divorce proceedings in order to secure the return of their advance. Things can become particularly difficult if the terms of the advance are not recorded in any way. Arguments could arise as to whether it was a gift or not.

“There are certain relatively easy steps that parents in these circumstances can take. Recording clearly on what basis the money is advanced or securing some interest in the property being the most obvious.

“Thankfully, The Court of Appeal has recently said that there is nothing wrong with a trust being set up to avoid a claim in divorce proceedings. It is always wise therefore to seek the advice of a suitably qualified solicitor before taking any steps.

“Relationship breakdown can be a difficult enough process on its own, however when issues of ownership, money and feuding families become involved the process can become markedly worse for all involved.

“We would urge all parties to gain legal advice as early on as possible to avoid any unnecessary heartbreak.”

For further information on the issues of asset management contact Peter Lynn and Partners on 01792 450010 or visit

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