‘Mum’s money was gone’: The parents losing financial gifts to their kids’ divorces

When Eve Simmons, 35, and her fiancé started looking to buy a house together in Hertfordshire at the end of 2020, they quickly realised they might need more money. “We went to look at a few and they were riddled with mould and pretty horrific,” says Eve. To increase their budget, Eve’s mum said she could give them some money towards the house. Eve, at first, was appalled. “ I told her, ‘Absolutely not!’ She barely had an income, and now she doesn’t have an income and is living on her pension. But she said: ‘I see it as an investment in you and your future.’ At the time, we thought that was going to be our family home, where we were going to have our children.” In the end, Eve agreed. “My mum gave us a large lump sum, which was not spare cash. It was basically her life savings.” Her mum put the money into Eve’s account, and she transferred it to a savings account in her fiancé’s name where all the money for the house and their upcoming wedding went. “All of the money that we had went straight into his account, which was major mistake number one,” explains Eve. Shorts “We agreed informally that it would all go into his savings account, and we would use it towards the deposit. Anything left over, we would use to redecorate,” says Eve. “I didn’t think twice about it. Neither of us considered that we needed to get some protections written down, which is now a huge regret.” Eve and her partner bought a house together in 2021 and got married in 2022. Six months later, her husband suddenly announced he wanted a divorce. “Overnight, he became a completely different person. He was unrecognisable, and his behaviour was all about the bottom line,” says Eve. In the divorce proceedings and selling of the house, Eve asked her partner to return the money that her mum had given to them towards their deposit. Having suggested they do mediation, she received an email from her husband saying that if she pursued the deposit money, everything would “be on the table” including her pension. “It was horrific, as if it wasn’t horrific enough already,” says Eve. “I tried to pull on his heartstrings and plead. I didn’t need the money, but it was my mum’s money and that feels awful.” It’s not unusual for people to get financial help from their parents, also known as the “Bank of Mum and Dad”, when buying a property. According to research from Savills, 53 per cent of first-time buyers rely on financial support from family members. It’s more common for people to receive money as gifts (32 per cent) although financial support can also come as a family loan (16 per cent). And as people continue to reel from the cost-of-living crisis and struggle to get on the property ladder, Shivi Rajput, a partner at Stowe Family Law, says that it’s becoming increasingly common for people to rely on their parents for money. “Divorce and separation don’t just impact the couple but the wider family as well. I’m seeing more break-ups that involve money and assets from different sources than ever before,” she says. “So many couples are using parents’ money to help with house purchasing. But this can cause issues down the line if the couple separates, especially where that money has become intermingled in the couple’s finances, and there was never clarity around who owned what and whether the parents wanted to be repaid.” Lawyer Shivi Rajput says that the increasing number of people buying property with family help is creating more complicated divorces Unfortunately, this is exactly what happened to Eve. The divorce lawyers described everything as being “meshed together in one pot”, she says. Eve’s partner said that after he’d accounted for all of the money they had spent on renovations, there was only a fifth left of her mum’s money. “We came up with this agreement that he would give me that leftover money in cash,” says Eve. “But he then asked for his engagement ring back. To which I said: ‘Sure, but please give me the money first, and then I will send the ring’.” Then, he sent her a letter to the office where she worked. “It said: ‘Hi Eve, I think it’s best that you keep the ring and I keep the money.’ That was the last I heard.” Now, Eve hugely regrets not having some financial protections in place. “The thought didn’t cross my mind that I might need to protect my money, or even that we would split up,” she says. “It was naive, stupid, careless, and irresponsible. In the eyes of the law, we had been given a gift from my family as a married couple and therefore, it was owned by both of us.” “My mum was heartbroken. The grief of losing a member of her family was compounded by the fact that there’s also this big monetary loss,” says Eve. “Overnight, my ex basically said: ‘Not only am I not in your family anymore but also, that money you gave me so I could have a nice life and a nice house? Well, I’m keeping it and you’re not getting it back.'” Eve’s mum, Michele Simmons, is widowed, and her husband and Eve’s dad passed away when Eve was 12. “As a single parent, my aim has always been to help my kids. So giving Eve the money was really important – I thought it would make a difference. They were starting their life together, and if I could give them a bit of help, it felt the right thing to do,” she explains. “I think that’s what upset me so much because [Eve’s ex-husband] knew all that, and the way he behaved was appalling.” “It didn’t occur to me that I should have put some rider on it. I was very naive,” says Michele. Eve’s divorce was finalised in 2023, and she now has a new partner, who she has a child with. She has also written What She Did Next, a book about her experience as well as that of other women who’ve been through sudden divorces. Eve did manage to buy a flat with her partner, but Michele found it extremely upsetting she had no money left to help with this purchase. Anya*, 38, is currently waiting to send the last payment to her ex-husband as part of their divorce settlement. “I cannot wait for that last payment to go through, and then I’ll be free of him forever,” she says. They were married in August 2014, and she filed for divorce in October 2020. “I knew after three months of marriage that I wanted a divorce. But he was a narcissist, so he kept pushing my confidence down and telling me that no one would ever love me like he does. He would accuse me of cheating while he was cheating, and he was an alcoholic and drug addict.” Her dad is an accountant who set up a property portfolio business to help provide financial security for his family. The business has five properties each worth in the “range of very low millions”, says Anya, who has a 33.3 per cent share in the business, and gets dividends of about £6,000 per year. During their divorce proceedings, Anya says her lawyer failed to put in the paperwork that her stake in the business was a “ring fenced asset”. Further down the line, the judge questioned these assets, and at the same time, her husband became ill and was diagnosed with MS. “His needs superseded my ring-fenced assets, which is fine. But it was my dad’s money. It wasn’t mine to give,” explains Anya. In the end, Anya spent £150,000 on legal fees and agreed to give her ex-husband £48,000 in three lump sums, the last of which is due in January. Anya put in £20,000 towards these costs, but her dad has paid for the majority of it. “My dad thought: ‘I’m going to give my daughter a future and put things in her name,’ and it screwed him over big time,” says Anya. “My dad has worked so hard his entire life, and because of one mistake that I made, that cushion for a care home – or something else he might need – is gone.” When parents loan or gift their adult children money in this way, it can become quite a grey area when they separate from their partners, Rajput explains. “Often there is never any real clarity around whether the money was to be repaid or not, and who the money is ultimately for,” she says. “There can be conversations, but more often than not, nothing is written down about intention. A gift made to one spouse may be argued as their separate and greater contribution. A gift made to purchase the family home, however, will likely always become part of the couple’s matrimonial wealth, even if the money came from one spouse’s parent.” To protect parental money and assets in case of a divorce or separation, clear communication and documentation is key – yet it’s often not pursued. A report from Legal & General found that 74 per cent of those making a significant financial gift to their child did not seek professional guidance. There is paperwork parents can put in place to help with this, says Mike Hiner, founder and director of Strategic Asset Protection, who also runs a TikTok account as The Asset Protection Guy. “If parents want the money treated as a loan, they need a proper written loan agreement, ideally a deed, signed at the time, with real repayment terms. If it is a gift, a simple signed letter saying it is a gift to your child alone, not to the couple, is a sensible start,” says Hiner. Mike Hiner says that any money given by family members should have a corresponding piece of paperwork to set out who exactly they gave the money to Crucially, you need these agreements in place before any money is transferred. “For a property, the child and their partner can sign a declaration of trust setting out who put in what, so the parents’ contribution comes back to their child if the home is sold. Unmarried couples should consider a cohabitation agreement, and married couples a prenuptial or postnuptial agreement,” says Hiner. For larger amounts of money, families may want to use a trust. “The money is held by trustees for the family, rather than handed to the child outright, which gives more control over where it ends up. None of this is about distrusting your child’s partner. It is about protecting your family’s future,” says Hiner. “Sadly, I learnt too late that there are several ways to protect the money you’re passing on to your kids,” says Michele, who wants other parents to be aware of the potential pitfalls. “However much you think it’s all happy-ever-after, the reality is you just don’t know, and you have to protect your child – and yourself.” *Name changed for privacy