Five mistakes parents make when giving adult children money – according to experts

The Bank of Mum and Dad in the UK props up home purchases, education, and increasingly, day-to-day living. As wages stay stagnant, and inflation rises, many parents and grandparents who are able to, are gifting or loaning their loved ones money. In fact, two-thirds of parents are considering gifting their children an early inheritance, and nearly half saying they’ve already given their children financial gifts, according to 2025 research from Wealthify. One in five homeowners in 2025 were helped by parents, and an average of £55,572 was given in parental loans and gifts according to research by Savills. Yet money is a difficult thing to discuss with family, and knowing how to pass on money while you’re still alive can be a financial conundrum. Here, experts explain the common mistakes and pitfalls to avoid. Shorts Assuming your child will be with their partner for ever Frances Bailey, is a specialist family lawyer at Mills & Reeve. “One of the areas of difficulty that we see,” she says, “is where parents gave their grown-up child a deposit to help them on to the property ladder, or they’ve passed wealth on as part of sensible inheritance tax planning, and haven’t thought about what might happen if that child’s relationship breaks down. “The parent might feel aghast if suddenly the son-in-law or daughter-in-law, who is now an ex and no longer in favour is saying, ‘I’ve got a claim to that money. That’s in our pot, and that should be divided between us as part of our settlement.” Bailey says that what might happen is the adult child, who has been given this deposit by her parents, says to her now-ex: “When we sell our £500k home, we owe my parents £125k,” and the ex son or daughter-in-law says, ‘no we don’t, that was a gift, and it should be split between us.’” David Macdonald, founder of wealth management service Path Financial, says often parents don’t want to imagine their child’s marriage breaking down – but that they should think realistically. “Johnny goes off and buys a nice pad with his wife, but five minutes later they’re divorced, and the parents have to watch the ex-spouse waltz off with half their money.” What can parents realistically do to protect their money in case of any future relationship breakdown? It depends on the specific situation, but parents can use a legal framework to set up a declaration of trust which states the gift belongs solely to their child. Or the money can be a gift, but protected with cohabitation, prenuptial, and post-nuptial agreements. “There’s 100 per cent a squeamishness around prenups,” says Bailey, “but it’s becoming a bit more socially acceptable to have them. “If there’s a family business, then there can be an expectation from the outset that each child will have prenups, postnups, cohabitation agreements – then, you’re not saying to your son-in-law [individually] that you don’t like them or trust them. Having this as a rule for everyone, whoever their partner is, feels less pointed.” Bailey had a client whose family were all in business together, and their shareholders’ agreement effectively stated that if they get married, there will be a prenup. “That’s easier, as then you’re not having an awkward conversation.” Ellie Milner, another partner at Mills & Reeve, who advises clients about estate planning and succession, says: “It’s worth protecting against that relationship that the parent thought was rock-solid, but might turn out not to be. There’s nothing worse than a client saying, ‘oh it’s fine, their partner is lovely.’ They’re lovely – until they’re not.” Fuelling sibling rows Protecting wealth is important, says Milner, but what’s crucial is to also protect family relationships. “When we’re talking to clients, they’ll often say, ‘my oldest child wants to buy a house, so we’re going to give them some money,’ but they’re not necessarily thinking about their two other younger children, and what provisions they might make for them as they get to that stage.” Will a parent have the means to do the same for those other children, or are they going to be differentiating between them? “That can cause issues in the family dynamic,” says Milner. “People make piecemeal decisions in the short term, but it’s good to take a step back and think, ‘what do we want to achieve here, and what does this look like for all of our children?'” If a parent is going to differentiate between children in terms of the money they give them, clarity is key. “We have a team who deals with inheritance disputes,” says Bailey, “and those are often about lack of communication. People haven’t been clear about why they’re perhaps giving money to one person and not the other. It might feel unnatural, because if you’re family, why do you need these formal conversations? However, it can really pay dividends later on if families have talked about this openly from the outset.” A parent might give their child who has kids a bigger amount to help with nursery fees, and the other child without their own kids might be fine with that – or they might see it as rejection, or preferential treatment. “Sit down with the next generation,” says Milner, “and say, ‘ok, you’ve done really well in life, how do you feel about us disproportionately helping your siblings? Is that going to be a problem?’” Macdonald adds that depending on how you divide up your assets to your children, “money can be the most poisonous legacy imaginable”. He refers to the Gucci family as an example of how not to do it. The Guccis have spent decades embroiled in jealousy and greed, with bitter legal battles over millions following the 1995 murder of Maurizio Gucci. While the vast majority of families are not dealing with this kind of immense wealth, families have still fallen out over much smaller amounts of cash. Frances Bailey, a specialist family lawyer, says: ‘There’s 100 per cent a squeamishness around prenups but it’s becoming more socially acceptable’ (Photo: Mills & Reeve) Making your offspring’s life too easy “If you’ve got a child who’s inclined to be a bit lazy or feckless,” says Macdonald, “I’d counsel against giving them too much of an easy ride financially. They may fall back into a more meaningless life than they could have if they’d had to make their own way, with a bit of struggle, make mistakes, and find out what life’s about.” Macdonald has found, in his work, that the more functional and well-adjusted the child is, the better they tend to cope with being given money. In his experience, when it comes to the very wealthy, there are those adult children who might live quite a modest life, do philanthropic work, or even take on a lower-paid job they find meaningful, like gardening or nursing, while being custodian to a fortune. “There are others who go down the cocaine-and-Ferrari route, buying up properties and assets, fighting their siblings, and keeping score of every penny.” Assuming you can control your child’s future “Clients differ wildly in the level of control they want in their adult children’s lives,” says Milner, “and they also differ hugely in what they believe is a worthy use of their money. With the best will in the world, your children grow up to be the people that they are, as much as we all like to think our parenting could dictate that. It can be challenging when the parents are high-achieving – maybe they’ve made their own money, and have children who aren’t minded in that way.” Milner says that the adult child might have taken a vocational path or aren’t motivated by buying a house. If a parent wants to give money to a child who isn’t necessarily going to “settle down”, it’s about bringing children into the conversation, and talking to them about their interests. “What motivates them? What’s their passion?” says Milner. “Talking about that can sometimes get parents over that hump of, ‘is this a reasonable use of the money I’ve worked incredibly hard for?’” You can legally stipulate what you want the money to be used for by creating certain types trust, where the money is only paid out for university, or a home. But if you give cash directly to an adult child, it becomes their legal property, and while you can of course verbally encourage them to use it for something specific, you can’t legally enforce how it’s used. Not leaving yourself enough money for a nice life Milner says that while there’s a drive to help children out, it’s also good not to rush into it. “Work out with a financial planner how you’re going to also get what you want from life – and that’s not the bare minimum. What do you want your retirement to look like? If you needed care, would you want that to be at home?” Trying to plan a long way into the future is key so you can understand what you can afford to give now, and then maybe a bit more in five or 10 years when there’s a bit more clarity around the future. “It’s something clients don’t always think about, and I have to say to them, ‘do you want to be in a position where your children are living a much easier life then you are?’ The fact that, actually, they might want to be able to go on some nice holidays, is perfectly reasonable.” Macdonald says that giving too much too early is a mistake, but there is also a risk of giving too little. “Most people die with too much money, because they’re worried they’ll run out. They could have helped their children when they were younger and needed it more, and been alive to see the impact.”At the same time, it’s important to accept that you might not get it completely right. “I see people in ‘paralysis by analysis’ where they’re going round and round the houses on money, and end up doing nothing, as they’re scared of making a mistake,” says Macdonald. “You don’t know what the future holds for investments, health, or the lives of your children. It can be bewildering for parents to figure out what best to do, but that’s why it’s worth getting advice from financial planners, and solicitors, so you’ve thought of your family’s interests, but also your own future.”