Legal Considerations When Your Adult Child Gets Married
A family wedding is always cause for celebration, particularly when watching your child walk down the aisle.
When your family expands, it can be a pertinent time to consider how to protect your family’s future and make any necessary updates to your lifetime planning and tax documents. Whether you wish to account for new family members in inheritance planning or to protect family assets down the line, speaking with a specialist Solicitor can help you ensure your wishes are followed.
Review Lifetime Planning
Your child’s marriage does not alter your existing Will, and so it is a useful time to consider if your current Will remains suitable. It could be worth considering whether you would like to include your son- or daughter-in-law, and any step-children, as beneficiaries.
If you do not already have a Will, a child’s marriage can be a good time to consider drafting one to make sure that your wishes are followed and everyone you wish to account for in your Will is included.
Also, a child’s marriage could prompt you to think about any specific gifts you are planning to leave them in your Will such as family heirlooms, property, or financial legacies. For example, if you plan to give one child a wedding present of considerable financial value during your lifetime, you may want to balance this within your estate planning for any other children. It might also be necessary to consider your Inheritance Tax position, including the effect that lifetime gifts might have on this, and ensure you are making use of any gifting allowances which might be available.
Consider Tax Options
As marriage can change your child’s financial position, it signals a relevant time for you to consider how your Inheritance Tax planning is structured. If you are planning to pass on wealth during your lifetime, it is important to understand Capital Gains Tax when gifting assets: this might be payable even if money does not change hands, such as gifting a house, or other property.
Making use of your annual gifting allowances can be a practical way to pass on assets efficiently. At JCP Solicitors, we can assist in reviewing your Inheritance Tax position to ensure that you are maximising your yearly allowances.
Making Gifts or Loans
Many parents choose to help children with costs towards a house in the lead up to, or after, a marriage. If doing so, it is important to make clear agreements to clarify whether you intend the money to be a loan, which is to be re-paid, or a gift, meaning it is likely to become part of your child’s “matrimonial assets”, meaning the property and finances which are shared between the couple may be subject to the Sharing Principle in the event of divorce.
A Declaration of Trust can set out any gifts made and who owns what share of a property or other assets. Every situation is different when it comes to monetary gifts and property, and your Solicitor can discuss the best options for you and your child.
Protection Through Agreements
It is wise to consider suggesting a Prenuptial Agreement to your child if you are planning to gift them money or property, as once they get married, it may be subject to the Sharing Principle if they use the money or property jointly with their partner.
A prenup can protect any assets your child already owns prior to the marriage, and sets clear expectations from the outset to lower the chances of disagreements at a later date.
For prenups to carry weight, they should ideally be signed at least 28 days prior to the wedding and involve independent legal advice for both individuals.
Family Business Planning
If you own a business, it is wise to put future protections in place: it could be worth updating shareholder agreements, making sure any partner buy-ins are properly safeguarded, and consider using Trusts to preserve long-term family wealth.
Taking these steps can ensure that assets remain within the family, better protecting your business if relationships change during the future.
For expert legal advice and guidance on family and lifetime planning law, JCP Solicitors can help. Contact either Rebecca Bates, Associate Solicitor in the Family Team, on 01792 525576 or rebecca.bates@jcpsolicitors.co.uk or Alice Rowlands, Senior Associate Solicitor in our Lifetime Planning Team on 01792 525462 or alice.rowlands@jcpsolicitors.co.uk.