The great wealth transfer has begun. The baby boomer generation are sitting on a huge amount of money and they are keen to share it with their families. <\/p>\n
But modern families have become more complex, something that the law hasn\u2019t caught up with yet, and a well-meaning financial gift could easily end up in the wrong hands.<\/p>\n
This is because many of the laws that protect families are based on the outdated concept that most people still live in a nuclear family made up of a married couple and their children \u2014 it doesn\u2019t cater for blended families, second marriages or couples living together long before a proposal is even (if ever) on the cards.<\/p>\n
If you\u2019re thinking about helping your child or grandchild with a house deposit, tread carefully if they are buying the property with someone else, no matter how head over heels in love they might be. They might be putting in a larger share of the deposit, but as soon as the transaction is complete, it\u2019s seen as joint property and the law often assumes a 50\/50 split should they part, unless they explicitly state otherwise. <\/p>\n
This means that your beloved daughter\u2019s now ex-boyfriend could walk away with half the money you gave your daughter just days after they move in \u2014 and by then, there\u2019s nothing you can do about it. To protect against this scenario, a deed of trust drawn up by a solicitor could help to ring-fence the money but the couple must own the home as tenants in common for it to apply. <\/p>\n
\u2022 Inheritance tax on pensions has triggered a middle-class panic<\/a><\/p>\n Many also don\u2019t realise that while love and marriage may not last for ever, a financial relationship often will. When you divorce, many people assume that getting a decree absolute (the final divorce paper) ends the financial connection between spouses. But it doesn\u2019t. That financial link is still there \u2014 and can be there indefinitely.<\/p>\n Your ex can even make a claim on money that you haven\u2019t amassed yet, such as a future inheritance or business success. <\/p>\n The case of Dale Vince, the founder of the green energy firm Ecotricity, and his ex-wife Kathleen Wyatt in 2015 should make us all take notice. Wyatt was granted the right to bring a financial claim 19 years after the pair divorced. Since their split Vince had become a multimillionaire and because they hadn\u2019t sorted out a formal financial agreement, the court ruled that she was entitled to a \u00a3300,000 settlement. <\/p>\n