Helping Your Child Buy a Home: How to Protect Your Gift if Their Relationship Ends

These options record your contribution clearly and help ensure it isn’t lost if your child divorces, separates, or faces financial difficulties.

Why an Outright Gift Can Be Risky

It’s very common for parents to help their children get onto the property ladder with a lump‑sum gift or by contributing to a deposit. But while gifting money outright feels simple, it can create problems later. And here’s why:

• If your child divorces

Outright gifts can become part of the matrimonial pot, meaning they may be shared with your child’s spouse—sometimes even if the spouse didn’t contribute financially.

• If your child faces financial trouble

The gift can become vulnerable if your child:

• goes bankrupt,
• gets into debt, or
• becomes involved in an inheritance or ownership dispute.

If intentions aren’t written down

Courts may treat the money as belonging to the couple jointly, not as a protected contribution from parents, if there is no evidence of your intention at the time of gifting.

A few simple legal steps can avoid these risks.

Declaration of Trust Protects Your Gift

A Declaration of Trust is one of the most effective and flexible ways to protect your contribution. It:

• records exactly how much you gave
• shows who owns what share of the property
• makes clear what should happen if the property is sold or if the couple separates

Example:
If you gift £80,000 towards the deposit, the Declaration of Trust can confirm that you (or your child alone) own that £80,000 share of the equity, plus any growth on that portion when the home is sold.

This document gives clarity to everyone involved and provides the court with clear evidence of intention if there’s ever a dispute.

Pre‑Nuptial and Post‑Nuptial Agreements

If your child is getting married, a pre‑nup or post‑nup can help protect your gift.

These agreements can:

• separate matrimonial and non‑matrimonial assets
• ring‑fence money gifted by parents
• set out what should happen to each person’s assets if the marriage ends

To be effective, both parties should receive independent legal advice and the agreement must be seen as fair.

These agreements are increasingly recognised by UK courts, especially when prepared properly and with full financial disclosure.

Trust Structures: A Long-Term Protection Option

If you want even more control, a trust can protect your contribution while allowing your child to benefit from the property.

A trust may be helpful if:

• you’re gifting a large sum
• you want to protect the money for multiple children or future generations
• your child has a partner you don’t know well
• your child is financially vulnerable or at high risk of debt

A discretionary trust, for example, lets you keep control over how the money is used and ensures the assets stay outside the matrimonial pot in most circumstances.

It can also offer potential tax advantages depending on how the structure is set up.

Which Option Is Best for Your Family?

There’s no single right answer, it depends on:

• how much you’re gifting
• whether your child is buying alone or with a partner
• whether a marriage or civil partnership is planned
• whether you want to retain control over the money
• your long-term family intentions

Most families use a Declaration of Trust or a pre/post‑nup, and some combine the two for maximum protection.

Life is unpredictable, and relationships can change in ways no family can fully plan for. Recent figures show that around 42% of marriages in the UK now end in divorce, and the number of divorces rose significantly in the most recent reporting year — increasing from 80,057 in 2022 to 102,678 in 2023, a jump of over 28%. With divorce becoming more common and financial pressures adding new complexities to modern relationships, protecting any gift you make to your child offers real peace of mind. Whether through a Declaration of Trust, a pre‑ or post‑nuptial agreement, or a tailored trust structure, taking even a small legal step now can safeguard your support for the future.

If you have any questions or would like advice on the best option for your family, our Wills, Trusts and Probate team are always happy to help.