Parents who transfer money to their children should always take legal advice if they wish to ensure that their generosity does not end up benefiting others. The point was strikingly made by the case of a promising young doctor who received substantial sums from his parents before his untimely death.
The son received more than £200,000 from his parents in the years before his death. He put some of the money towards the purchase of his first home. He married his girlfriend a month before he died and left her the entirety of his estate, including the property, in his will. In those circumstances, the parents launched proceedings against the widow, seeking recovery of the money.
In ruling on the case, the High Court rejected the parents’ plea that the widow held the property on trust for them. The widow’s family had also contributed substantially to the young couple’s coffers and there had been no discussion of the parents having a beneficial interest in the property. Regardless of how much of their money had gone into buying the property, there had been no common intention to create a trust.
Although the Court accepted that the grateful son had promised to repay his parents, it noted that the relationship was very different from that between a creditor and a debtor. The son’s promises reflected his sense of filial obligation and did not put him under an enforceable legal obligation to repay his parents. There was also no evidence that the parents had any actual expectation that they would get their money back. In those circumstances, their case was dismissed.
