Post # 1
i have heard of parents giving their child and future SIL or DIL money towards a down payment of a house. Future Mother-In-Law wants a prenup on the 100k she’d like to put toward house.
I do not like the idea of a prenup, but this would be exclusively protecting her money, not mine or my future husband’s. That being said, she wants to put a hefty chunk of this money toward the house, also protected through the prenup..
what I am confused about is that USUALLY fair prenups protect assets that go BEFORE marriage. If my husband and I are buying a home, this would be something we have within our marriage. Now I am happy to accept a down payment gift, but feel very hurt that there are constraints on such a present. Given how much the gift is and how it is being protected, I quite frankly would feel as if I don’t truly “own” my house with my future husband.
I am writing on this board to vent and ask for any advice or opinions.. is putting a prenup on a down payment for an engaged couple fair? It seems a bit contradicting to me. I feel as though Mother-In-Law shouldn’t consider helping us if she is worried about where her money will go.. she knows this gift is FOR a marriage right? not against one?
i understand why she wants a prenup on the inheritance money and am not arguing that (although in a perfect world none of this would exist). She also has been through a divorce and has seen some of her money go to her ex. Anyways.. has anyone had experience with this?? Thoughts?
Post # 2
It is her money so if she wants to put conditions on it then so be it. I certainly see her view given it is $100k which is a lot of money and wanting to protect that in the event of a divorce.
If you don’t like the conditions then don’t accept the money.
Post # 3
This could be a real dumpster fire if you ever split up.
These things are never as simple as they seem. Absolutely consult with a qualified attorney before signing anything. Most states in the US won’t recognize a prenup as valid unless both parties were represented by counsel.
Post # 4
I’ve seen people say this many times on this site: “fair prenup cover assets [from] before marriage” – this is wrong. In general, assets owned or otherwise obtained before marriage are (and remain) one person’s separate property that their spouse won’t have a claim to after a divorce. There are exceptions of course, such as when these assets are comingled with marital assets, etc. The whole point of a prenup is to protect assets that are earned/obtained during marriage which would otherwise be marital assets (i.e., one party earns a lot more than the other and doesn’t want to split savings made during marriage 50/50 on divorce).
Anyway, to the point of your post: I don’t think it’s unreasonable that your Mother-In-Law wants her very large sum of money to go to her son if you ever divorce.
Post # 5
where I’m from the most common prenup is couple protecing heir future inheritance. So when one of the couple receives an inheritance the other doesn’t have a right for it. Also parents makin wills that excludes their SIL and DIL to have right for their inheritance are increasingly common.
Like PPs said, consult a lawyer but I don’t thin your in-laws are out of line. 100K is a lot of money and it makes sense that in a case of divorce she would want it to go towards her son. If you are not comfortable with the arrangements (which is understandable) you can always decline it.
Post # 6
justnotsure90 : Now I am happy to accept a down payment gift, but feel very hurt that there are constraints on such a present.
You are happy to accept the 100k gift but are hurt that if you got divorced this money belongs to your ex husband? Personally I think a prenup on this is fair, all it is saying is the first 100k of the house belongs to your husband rather than a full 50/50 split.
In the UK this is very common, it is known as a Declaration of Trust and is separate to a prenup. It is used on property purchases when the two owners want to register separate stakes in the property should the couple split up.
Post # 7
Thank you for your perspective and bringing up declaration of trust. I initially thanked and declined this offer when first offered, but it is still being discussed by FH and MIH so I decided to get some opinions. I’m not really familiar with this because I did not grow up knowing anyone with prenups. Also am not familiar with inheritances either. I have a few friends whose parents have given the couple a down payment, but there was never a contract involved. And no, it wasn’t the same amount of money in these cases, but it was a large amount. It’s safe to say I’m not familiar with the norms of all this. But thanks for your comment because I have not been thinking of the aftermath of a divorce.. just the feeling of “ownership” of a home while being married
Post # 8
justnotsure90 : I think there are a lot of myths around prenups and divorce and I can completely understand why you would feel slighted by the request. You just have to think of this as your Mother-In-Law giving her son 100k, whether he was with you or not, rather than her wanting to give you each 50k. I don’t think this is an awful string attached that will control your life, unless you feel this is typical of your Mother-In-Law and she’s using it as a form of control.
I would advise you to not view this a an act of distrust but merely the Mother-In-Law ensuring in the unlikely event that you split up that her son still has the 100k to put a down payment of his own down on another house. Use the money to secure a great interest rate on your mortgage and use the freed up money for joint investments between you and your husband and completely forget about the 100k.
Post # 9
Stand up tall and proud and happily accept this nice gift and accept the conditions with it. Meaning you aren’t planning on divorcing him so you understand that this money goes to him if two years from now you happen to divorce. It is his mother’s money and she can choose to protect it. But maybe there will be some stipulations in the prenup that after 20 years its common marital property something like that. And I know we are referring to this as a “gift” but I feel anything more than 10k goes into a separte category of its own! It more like a loan that she will never ask back because eventually it would have been passed down to her son anyway. Also just having 100K as a down payment is a gift in itself because of the amount you will save from having a reduced loan payment for the remainder of the mortage. It’s win win and its fair.
Post # 10
This is actually common. It may not be coming from your actual mother-in-law, but advice she may have recieved from one of her trusted advisors, be at her CPA or her attorney or her a financial planner. She doesn’t have that money sitting in a mattress , so she may have inquired with one of her advisers on either how to pull the money out or if there would be tax ramifications on it or something and they may have mentioned it to her about suggesting a prenup
Post # 11
I think it’s reasonable. If you split up after a couple years, she doesn’t want her very large investment in the house going half to you. Sorry :/
Gifts are not required – you can say no if you’re not comfortable with it.
But I think it’s a pretty great deal. Hopefully you never divorce, and so the house is always both yours and it’s not an issue. And if you do, then all the money you’ve put into it via your mortgage (which will be a lot higher than most people with a 100k down payment! Less interest, more principal) will still be marital funds to split.
Frankly this is an awesome offer and if you don’t want it, send her my way 😉 I had to come up with all my own (somewhat minimal) down payment, and so a lot of my mortgage payments to go interest and that sucks. I think you say thank you VERY graciously and accept her very generous offer.
Post # 12
Comingling is precisely what I’m thinking. There could be an argument made eventually that Fi gifted a share of his gift to the marital community and it must be treated as community property.
There are other ways the Mother-In-Law could give her son that money as a gift that would be less potentially messy.
No one should ever sign any pre nup without the advice of counsel.
Post # 13
Why do you feel entitled to keep 50k of your mils money should you split up???
what she is offering is very generous, and if the only reason you don’t like the offer is because you wouldn’t get half in a divorce (and are also upset about not getting inheritance) then I think you should reconsider marriage.
Post # 14
I get where your Mother-In-Law is coming from, but we don’t know what kind of person she is – is this gift a means of maintaining some level of control in her sons life? Will she specify where she wants you two to live, or what type of house? I’d be more concerned about this potential issue since a controlling Mother-In-Law can make your life hell, ask me how I know. Additionally, If you have children will she feel entitled to pop in anytime because she paid for part of the house?
If you divorce after 10 years, will your Mother-In-Law simply get her $100k back, or will she be entitled to some of the appreciation of the asset that her money was invested in?
Post # 15
justnotsure90 : My Parents gave us a lump sum towards our first home. They set it up in such a way that it’s basically a loan that will not have to be paid unless our marriage is dissolved. If we get a divorce, both husband and I are liable to pay back that amount into the family trust. It’s to protect family assests and keep the money in the family for our children, nieces, nephews and grand children.
If you don’t like the conditions then you don’t accept the money. It’s pretty simple. If you do end up divorcing you still get the equity in your home to divide between you but the amount from your Mother-In-Law goes back to her to do with it what she sees fit.
My in-laws gave my husband a lump sum from a bank account they set up and contributed towards from infancy. Husband used it towards our first home too. We didn’t draw up an agreement for that money but If we did break up down the track, I’d never want to take any portion of that money because it was his families money.
I believe that fairness and doing the right thing in bad times accounts for more than in good times. Accepting your MILs conditions on her generous gift is part of being fair and doing the right thing in bad times as well as good. Put yourself in her shoes. She’s protecting her assets for her child and any future family. You are profiting from it too. You will have less of a mortgage to pay and will own your house sooner. Consider yourself lucky and thankful for a generous gift.