We are seeing that individuals are keen to move onto the property ladder, or help their children to do so, when doing this by transferring part of your property to your child there are provisions that must be put in place in order to protect yourself & your child.
Whether this help is offered in the form of a lump sum of money or transferring part of your farm to your child, this is often done as a recognition of the years of help from your child with the family farm. Whilst not always the nicest thoughts to have, it is important to think about what could go wrong in the future. Specifically, protecting yourselves & your child from claims by your child’s unmarried partner. Even if the property is in your child’s name, their unmarried partner is still able to make a claim for a share in it if the relationship breaks down, or claim against your child’s estate if they pass away.
We have detailed our top tips to remember when gifting or loaning your child money to purchase a house, or are transferring part of your farm to them:
A legal charge must be put in place to secure your loan against their property. In doing so you will protect your loan in the event of a third party (such as an unmarried partner) making a claim against the property in the future.
Transferring part of your farm
A condition of the transfer should be put in place, so that your child will enter into a Cohabitation Agreement with any person that moves in with them. This agreement will protect your child against any claims made against their property or estate. If your child plans to marry they may also want to consider a prenuptial agreement.
Child & partner moving onto your farm
Again, we suggest a Cohabitation Agreement but this time between you, your child & their partner. This agreement will outline the conditions of their occupation of the farm. If your child & their partner are working on the farm, you should discuss remuneration & their expectations for the future.
All of the tips above do require legal help that will ensure each condition is put in place successfully, thus protecting you & your child in the future. We are experienced in working with agricultural matters as well as loaning any sum of money.
Have a chat with our legal experts by calling us today for a free consultation.