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A Family and money dilemma (starring my mate Dave)
Donny Darko's … 31 Jan 19 12:14
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So my mate Dave has come to me for a bit of advice...

His sister split up from her husband a while back and the family home ended up being sold.  She lives in a rented house with her two kids.  She apparently hasn't 'got the paperwork sorted' on the divorce yet. 

Despite being a drunken wastrel of widely known ill repute my mate Dave has achieved some degree of financial success and so offered that, when she had got her sh1t together and was ready he would 'lend' (i.e. realistically give) his sister the deposit for a house.

A year or so passes and Dave's sis meets a new bloke.  Said bloke is also recently separated and in a similar paperwork light sort of situation on the divorce front although a bit further down the track and it's underway. He has a couple of kids also.  They have only been together a few months but Dave's sis has managed to get herself up duffed.  She now wants to buy a house with new bloke and has asked if the offer still stands re the deposit. The new bloke is a bit light on the financial side what with still paying the mortgage on the house his (soon to be ex) wife lives in with his two kids and so will not be bringing much in the way of deposit to the table.  Dave is not entirely convinced that buying a house with a bloke his sis hasn't known very long and who is mid divorce is the finest of ideas that his sister has ever had and her judgement in these matters has not been what you might call faultless over the years.  His sis cannot afford to buy the house she wants i.e. one big enough to house all the rugrats (of various parentage) at the same time alone unless Dave sticks his hand deeper in his pocket than, if he is honest, he really wants to so it won't really fly to suggest that she goes it alone. 

What do I say to Dave.  Say no? Try to stick his nose in a bit and at least make sure there is a deed of trust making it clear his sis contributed the deposit? or just hand over the deposit and start provisioning for the fact he'll probably have to find another one in a few years when this all goes to sh1t?

Dave's sis still lives in the crap town that Dave grew up in so the sums of money involved, while not trivial, aren't going to move the dial on Dave's long term future or anything but Dave's wife is probably not going to be thrilled about the 'loan' (assuming he tells her, which is a dilemma for another day). 

Can Dave dial back on the offer, say it was predicated on davesis being single and not about to get married, still put the cash in but say you either want a share of or charge over the house. 

Sorry - Dave wants a share of etc and so on

in short, one way or another this is likely to lead to arguments, either now or later, so Dave may as well take the course of action that protects his cash. 

I think Dave worries that suggesting he buys the house with his sister so that new bloke isn't the in the picture might seem a bit heavy handed/controlling/negative about the new bloke. Plus that really would be a difficult idea to sell to Mrs Dave I think. 

1. Say it's a loan, get the requisite paper drafted up etc so his money can come back to him if it all goes the way of tits

2. Dec of Trust re her share if it's a gift and he wants her to protect it

3. Buy a house himself for her to live in and get her to pay him market rent.

4. Run away and tell her to sort her own stuff out.

1. why is it difficult to sell to dave's wife if Dave gets equity in said house?

2. negative about the new bloke? Dave don't know this bloke and is merely prudent

otherwise, what ZG sed

Realistically this:

"or just hand over the deposit and start provisioning for the fact he'll probably have to find another one in a few years when this all goes to sh1t?"

If there is a second time at least 'Dave' will have a good excuse to get in quickly and buy a house for her to live in at a subsidised rent.

I reckon 'Dave' would be doing himself and his sister no favours with the father of his new niece / nephew were he to be seen to be controlling his sister's life and starting from a position of (what they will see as) distrust over the new bloke.  Even more so if 'Dave''s circumstances were, to pick a random example, being a class traitor, slave owner over in some sandpit jurisdiction.

I think Sails probably has it.  There would realistically need to be a mortgage if Dave bought the house with his sister or on his own as an investment as I understand Dave doesn't keep the sort of cash required to buy 4 bedroom houses (even if they are in crap towns) lying around.  Dave lives abroad and so getting a UK mortgage would be a PITA and also he would then definitely have to explain it all to Mrs Dave who would, I understand, probably go a bit batsh1t, as she isn't the biggest fan of Dave's sis (or so I am told).

What's the second charge in favour of Dave for if he's taking an equity share in the property?  Alternatively, if Dave is a lender, what's the declaration of trust in his favour for?

Is this some sort of havecakeandeatit debtquity finance? 

Dave should run away to Thailand, change his name to Ricardo and live on the beach for the rest of his days.

Metaphorically, I assume he has enough saved up for a nice beachfront property.

 

also if he tries to keep it secret the wife will go extra mental when she inevitably finds out and probably divorce Dave and claim it's some sort of unreasonable distribution of marital assets or sthg

" She now wants to buy a house with new bloke and has asked if the offer still stands re the deposit."

Dave's simple answer to this simple question is, simply, "No".

Arbiter - yeah, I actually hadn't read Sails' post properly.  I don't think Dave should ask for a second charge and it would limit the mortgage options a lot I suspect.  I do think he should try to get his sister to ask for a deed of trust to reflect the deposit contribution. I think if the new bloke gets upset by that he is probably a bit of a dick given they have only been together a few months. 

Buzz - second charge would be for Dave

Deed of Trust would be for sis (not Dave) to reflect she put the deposit in.

Second charge is OTT in my view. 

 

"I think if the new bloke gets upset by that he is probably a bit of a dick given they have only been together a few months."

 

why on earth should he get upset? he gets a roof over his head, a place to stay. f he doesn't like it he can go look for the deposit himself somewhere

What Donny said.  Declaration of trust to deal with split of sale proceeds between sis and dubious bloke and second charge to make sure Dave gets his money back as well.

In my experience lenders are relatively relaxed about second charges to family members but don't like second charges to secure other commercial lending.

I don’t understand - why would Dave need his wife’s approval to help his sister out? If he has the cash and it won’t significantly change the family financial position? I mean I can understand if Dave wants to mortgage the family home to help his sister but if he’s chucking some cash from his savings to her, so what?

If I were Dave's wife and I discovered that Dave had used our marital assets to make a gift to his sister without clearing it with me first, I would be very tempted to divorce the fooker for lying by omission and then argue that it was a deliberate attempt to dispose of said marital assets in advance of our financial proceedings.

The scariest part of this is the concept that Dave's sister may be about to acquire a capital asset before she has a clean break agreement rubber stamped by a judge. That's just asking for trouble.  If nothing else, use that to help Dave stall for time because that isn't a can of worms that needs opening.

 

Oh and yeah he really needs to talk to the wife about this because it's a bloody stupid and maritally suicidal thing to do without her knowing.  A cheeky £50 to help her out everynow and again is one thing, this is just a tad more serious.

Your equanimity knows no bounds, Penelope. I seem to remember the actual Penelope was (while no pushover) a far more tolerant type.

I suppose the answer for Dave is to do whatever he feels like he wants to do. What does he want to do?

Spurious, if Mr Penelope gave a significant sum of money to one of his siblings without clearing it with me he could expect to find his bollocks mysteriously becoming separated from the rest of his body.

In my experience with these things... which is fairly significant. 

When dealing with family and money you basically have to be prepared to hand it over and never see it again. 

This thread reminds me why being single and not having to consult anyone else about what I do with my money is a fabulous thing.

‘If I were Dave's wife and I discovered that Dave had used our marital assets to make a gift to his sister without clearing it with me first, I would be very tempted to divorce the fooker for lying by omission and then argue that it was a deliberate attempt to dispose of said marital assets in advance of our financial proceedings.’

You sound great.

Donny, just give your sister some cash but on the condition that the percentage equity that the deposit has bought is ringfenced. Ten years down the line the 50K could have doubled. Or the way the country is going you  might be able to use it to buy two freddos and a packet of quavers.

I'm honestly baffled why on a forum full of lawyers, some of whom may even be family lawyers and several of whom I know have definitely had their own divorces, anyone would advocate giving money or an asset to a family member who is not yet divorced and hasn't got a financial settlement order in place yet.

I mean you do know how this stuff works, right?  It's a Bad Idea.

 

Don't lend the money.  The offer was predicated on sis being alone.  If you do lend secure it and tell the wife first.  For the love of God, tell the wife first.

I think Dave sounds like a decent chap, however, I have no understanding of how divorce works as nobody I know well has ever done it.  Well one friend has but as he never told us about getting married in the first place he couldn't tell us about the divorce either.

Tell your mate Dave that losing a chunk of cash is much better than having that same family member pitching up at your house/property and deciding that from now on they live there and will build whatever they want on your property. 

Including illegal structures like boat jetties that would incur a 50k fine.

 

?

 

speaking from experience 

From my (emphasis on my) POV this is binary

It's really either a proper arrangement that protects the gift to Dave's sister from the risks from some untested relationship or it's a simple gift.

If it were me, depending on the importance of the amount obv,  I'd lean towards arrangement for sommit over (say) £10k .

I've "helped" before now and basically was grumpy for a couple of years over a few grand but I'm now over it. I reckon I'd stay grumpy if it were more than £10k, hence the figure. But that's just me.

I also I remember when my mate dave's sister decided to put ALOT into her husbands biz and encountered a weird weird resistance to spending money on the legals to have a proper arrangement in place

*sigh* that did not go well

Madders stop being so weird. Don't hide this shit from your wife FFS.  what's the point of earning all that money if you're going to be a twot with it and ruin your relationship

If your missus can't see that the money you're giving isn't OTT and won't impact on her quality of life then she's a twot as well.

 

If your sis can't appreciate that you want to protect your gift / her interests then she's a twot.

 

Can you all stop being twots.

 

When we gave money to my sis we did a trust thing cos we didnt really like her bloke. He didn't care or understand what was going on anyway. He ended up living in a nicer flat than he would have been able to afford anyway 

Again, what is this "hiding" business (unless Dave actively lies to his wife about it)? Does he also need to notify his wife in advance that he is planning to spend £3.50 at Starbucks today? How about getting approval to spend £100 on a nice dinner out with his mates? 

*Provided* it doesn't affect their overall financial position, why is £30k (or whatever) any different? 

But that's the wrong question Bam - my wife isn't thrilled when I come home hammered after drinking with my friends, or if eat a large ice cream when I'm supposed to be on a diet. 

"My wife wouldn't like it if I did X" does not make X wrong. 

 

(and I'm not suggesting actively lying or deceiving her - but he has no positive obligation to "get clearance" from her)

I agree. Depends on the amount. If it is enough to materially affect the family finances, then it's a joint thing and she deserves to know. But the OP makes it clear that Dave has enough money that it *won't* affect the family's financial position. 

It really isn't. I mean you can choose to be that intense about relationships but they don't have to be.

I spend a lot of money on my children, who are not my wife's children. I don't ask for or need her permission. She has no idea about the amounts because we have more interesting things to talk about.

That's different to a sister, of course, but it shows there is no hard and fast rule.

I am well aware that I will probably never marry or have another long term relationship.  But if I did, I would not keep financial secrets from my partner, and I would struggle to deal with him keeping financial secrets from me.

It's generally the secrets and the hiding / lying, not the money, that will be the issue.

There are no secrets or lies. She knows I spend money. She has no interest in knowing how much.

I'm not saying I wouldn't mention it - I would. I'm just disagreeing with the "What's his is hers" rhetoric which I think is a bit OTT.

If he has to do it all do it on this basis:-

1. First both couples must finanlise their divorce and he wants to see the sealed court financial consent / order.

2. Then he makes a loan to her in writing -l oan agreement.

3. Her new lover moves in having signed a cohabitation agreement.

4. She makes a will leaving the house to the brother in trust for her children both with her old and new husband once the loan has been repaid.

That's what I've been saying for days, heh.  Lydia's point 1 is the same as I have been making, there *must* be a clean break agreement before any monies go anywhere.

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