Legal Eagle: Seek advice when someone asks for their cash donation for house deposit to be returned

If you are in the negotiation and/or mediation stage regarding the marital assets, then this will be a discussion for you to have with your wife, or for your solicitors to discuss. If an agreement is reached within these negotiations, then this matter could settle outside of Court. You must engage pro-actively in any negotiations and mediation, exhausting all options before issuing proceedings. This is to try and settle amicably and without Court involvement. Settling outside of Court is likely to be more efficient and cost effective.

Should negotiations be unsuccessful, you may need to issue financial remedy proceedings. Whether your grandfather can recover this money through financial remedy court proceedings, will be dependent on the purpose of the money given. If this money was given as a loan, then there will be an expectation that the money should be paid back to your grandfather. If the money was given as a gift, then the Court are unlikely to order it is returned on the divorce. However, the Court will consider all other circumstances in addition to this, and the outcome is determined on a case-by-case basis.

The Court will consider all circumstances including whether the money was a gift or a loan, the length of time since the £10,000.00 was given, whether your grandfather has sought for the money to be returned before now, the needs of both parties, whether there are any children involved, etc.

You may need to provide evidence of the loan/gift and of the circumstances of this. You need to consider whether the mortgage lender were aware of the money as your grandfather may have signed a document stating whether the money was a loan or a gift. You may also have informal documentation, such as a text message or a reference on your bank statements confirming whether the money was a loan or a gift.

Your grandfather may need to be joined as a party to the proceedings if his position is that he has a financial interest in the property. This means he may need to instruct his own solicitor or represent himself at a Court Hearing to ensure his position is put across to the Court.

Ultimately, if an agreement cannot be reached in the negotiation stages, this will be a matter for the Court.

You and your grandfather should both seek independent legal advice from a solicitor who can consider the evidence and advise as to the likely position and outcome in relation to the £10,000.00. This will allow you to make informed decisions in how to proceed and to weigh up the additional legal costs with the likely outcome.