Our Family and Matrimonial team are seeing an increasing number of cases where the well-meaning ‘Bank of Mum and Dad’ is trying to retrieve its money from their child’s former partner or spouse following a split.

With one in three first time property purchases made by couples attempting to overcome the UK’s unaffordable housing market we are expecting the tidal wave of enquiries to continue in the coming months and years as relationships break down.

In most cases the disputes are over whether the cash was initially intended as a gift or a loan. But without a prior formal agreement it can be difficult to prove intent at the time, leaving the other party room to argue it was a gift that doesn’t need to be repaid.

“The difficulty occurs when what was an informal arrangement is later looked at in a different light. What was a non-issue in happier times can become a significant area of dispute.”

It is important for a court to make the distinction, as gifts will be included in the matrimonial pot of assets to be distributed upon divorce whereas loans are classed as a liability to be repaid. In such cases, loans will be deducted from the total assets which results in less overall to divide.

The loan can often represent a significant portion of the assets so it really does make a difference as to whether or not it is an asset that can be split, or something that will not be entered into the calculations.

Issues can be further complicated by whether the courts are dealing with hard liabilities – mortgages, credit cards or commercial loan repayments – or “soft” liabilities such as loans from family and friends without formal repayment terms. In such cases of soft liabilities a court may decide there is less priority for repayment.

When acting for a person whose family has advanced the money and is insisting it needs to be repaid, we will look for evidence that supports it was a loan. Is there a written agreement? Were there emails? Have repayments been made? Quite often we find there may have been really large payments made shortly before the issue of proceedings. In such cases we will go through bank statements, ask questions on such payments and request further evidence.

Where property is concerned, parents should consider registering a charge over the title to the property, which in effect sets out clearly that the loan is there to be repaid.

Pre and post nuptial agreements also offer very clear protection while declarations of trust between parents and their children and / or their children’s spouses also give a clear record of intent.

For further advice on this… or any other Family and Matrimonial matters, please contact our expert team who will be happy to assist.

Article written by Head of Family and Matrimonial, Solicitor Kate Booth.

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Parental Responsibility (“PR”) means the rights and responsibilities to make decisions for a child who is under the age of 18.

Mothers and married parents always, have PR.  Fathers who are named on the child’s birth certificate, or who enter into a formal agreement will also have PR. The court can also make an order giving PR. 

But what happens if one or both parents die or if a single parent dies and the other parent has PR but has had little or nothing to do with the child.  Who cares for the child then? 

In blended families, parents sometimes assume that a step-parent will automatically take on care of their children. However this will not be the case where the step parent does not have PR.

Parents need to give consideration to appointing a guardian in their Will.  A parent may understandably not want to consider their own death, particularly if they are in good health, however in order to ensure their children are cared for by someone they trust and whom the children are familiar with, this issue needs to be considered.

Anyone can be appointed as a guardian as long as they are over 18.  In addition, more than one person can be appointed as a guardian.  

Appointing a guardian can be achieved by a provision in your will.  This allows the parent to have that conversation with their chosen guardian in advance to ensure that they are happy to take on the role should it become necessary.  When appointing a guardian, a parent can also include their wishes as to how they would like the chid to be raised e.g., in relation to religion or schooling decisions. 

A guardian is given PR in the event of the death of the person appointing them and therefore takes on the responsibilities that PR provides.  If there is another person who has PR for the children, then the guardian will share this. 

Appointing a guardian can be achieved by way of provision in your will.  Applications can be made to the courts by a proposed guardian, but they would need to attend a family mediation meeting first.  When considering such an application the court will have regard to the following:

• The child’s own wishes and feelings and their age and understanding
• The child’s relationship with the prospective guardian
• How capable the proposed guardian is of meeting the child’s needs
• The recorded wishes of a deceased parent and the wishes of the child’s nearest relatives. 

If the person appointing the guardian dies and there is no other person with PR, then the appointment of the guardian will take effect immediately.  If there were child arrangements order in place naming the guardian as the person with whom the child should live, then the appointment will also take effect immediately even if there is another who holds PR.  The guardian will then share PR with that other person. 

If the surviving parent was also named in the child arrangements order as a party with whom the child should live, then then appointment will not take effect immediately.  If there is a dispute regarding where the child should live, then the parent of the proposed guardian would need to make an application to the court. The parent could also apply to have the guardianship terminated.  The appointment of a guardian will also not take effect immediately if the surviving parent has PR and there is no order in their favour.  It would not take effect until the surviving parent had died. 

The guardianship would end when the child reaches the age of 18 or if an application to terminate the guardianship was made to the court before then and succeeded. 

Our Family Department are happy to discuss these matters with you in more detail and explore with you the right solution for your family. Contact our friendly team for assistance.

Article written by Natasha Aspinall

The post Guardianship: what exactly is this? Who can be appointed as a Guardian and who will care for my children if I die? appeared first on Brindley Twist Tafft & James.