What about Granny? – Dealing with the ‘Granny Annexe’ on Divorce

Going through a Divorce and trying to negotiate a financial settlement can be a very stressful time, but if grandparents are also living in the family home, or in an annexe, this can add another layer of complexity and emotion.

With the growing need for childcare, and elderly parents needing more support but wishing to retain independence, grandparents sometimes move into the family home or an annexe on the land. Whilst this may meet the entire family’s needs during the ‘good times’, if the couple then decide to separate and divorce, this can raise lots of difficult questions, such as:

• Did the grandparents put any money in? If they did, was this by way of gift or loan?
• Is there any paperwork – i.e. a Declaration of Trust or Loan Agreement?
• Can one spouse afford to ‘buy’ the other spouse out, so that they can stay there with the grandparents? Can the grandparents help with the ‘buy out’?
• If the house has to be sold, will the grandparents receive any share of the sale proceeds? Where will they go?

If money was exchanged, but was intended, and can be proved to be, a ‘loan’, is it going to be considered a formal, repayable loan, or a ‘soft’ loan, which does not need to be repaid? Whether or not repayments have ever been made to the grandparents will be a relevant factor in reaching this assessment.

If the case goes to Court, the grandparents may need to be ‘joined’, this means that they can give evidence and be involved in the process and decision.

Court proceedings can be very expensive and stressful, however, it is impossible to predict what the outcome of a case will be. Mediation may help in the event of separation/divorce to reach an agreement, but detailed paperwork is key to all involved.

When buying with parents/adult children or investing in property, it is very important to give matters careful thought and for both sides to take legal advice. This not only avoids possible difficulties in the event of divorce, but also to record intentions if a grandparent dies and leaves other adult children, whom may have an interest in their estate.

For further advice on divorce and financial settlements please contact Daniel Sims directly on danielsims@fraserdawbarns.com or on 01553 666407.

Fraser Dawbarns have a team of friendly and experienced lawyers who can offer advice on a range of family matters in King’s Lynn, Wisbech, Downham Market, March and Ely.

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This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek advice specific to your own circumstances.  Fraser Dawbarns LLP are always happy to provide such advice.