Trust Issues with Bank of Mum & Dad

With parents having a lack of trust in potential in-laws they are reviewing the use of cash payments to children for house purchases. Instead they are looking at will trusts and putting boundaries in place with regards to cash deposits.

Bank of mum and dad are effectively one of the nation’s biggest mortgage lenders to help children get on the housing ladder.

Research has shown that around half of all parents have a lack of trust with their in-laws and this effects when or how they would give money to their children, including helping them to buy their first home.


There are a number of steps which can help protect the potential money given to children for property purchases:

  • Declarations of trust covering the deposits
  • A straight loan for the property
  • Setting up a trust in a Will


If you are loaning the money rather than gifting the money, it is important to make sure it is done by a formal document setting out the circumstances in which the loan would be repaid.

You can set up a will with an embedded trust, there are a number of options which can be done for this, but the most common one is to give the child a ‘life interest’ in a property or investments. This will give them the right to live in the property or enjoy the income from the investments for their life, but they do not have ownership of the asset.

Setting up a trust in a Will can offer increased asset protection for your loved ones.


Simple financial planning can ensure that gifts of money or property assets will only go to the people you care about.