By Hayley Crossman-Shaw, Head of Family Law at Hethertons Solicitors
With more families living in multi-generational households, it is increasingly common for parents to contribute financially towards a home owned by their adult children.
These arrangements are often entered into with the best of intentions, rooted in trust, family support and long-term planning.
However, as the recent Central Family Court decision in A v N and R [2025] EWFC 371 (B) demonstrates, such informal arrangements can give rise to complex legal disputes when relationships later break down.
This case is notable not only for its outcome, but also because the judge expressly approved it for publication to make others aware of the risks involved.
The court recognised that there is relatively little reported case law addressing interveners who contribute to a family home but are not on the legal title, particularly where that contribution is tied to occupation rather than outright ownership.
In a society where multi-generational living is becoming the norm rather than the exception, the judgment provides important guidance and a clear warning.
In this article, I will explore the outcome of this case, in which we acted for the intervener and the steps that can be taken by other families to avoid these issues.
The role of the intervenor
In this case, the wife’s elderly mother had contributed substantial sums towards the purchase and improvement of the former matrimonial home, including funding the construction of a self-contained annexe in which she lived.
When the marriage later broke down, she intervened in the financial remedy proceedings, seeking recognition of her interest.
The court made clear that where a third party intervenes in divorce proceedings, two distinct exercises must be undertaken.
First, the court must determine whether the intervenor has a beneficial interest in the property under ordinary principles of property law.
Only once that exercise is complete can the court move on to the discretionary division of matrimonial assets under the Matrimonial Causes Act 1973.
This distinction is critical, as the family court does not apply a broad brush or fairness-based approach when determining third-party property rights.
Instead, it applies strict civil law principles in the same way the Chancery Division would.
Gift, loan or something else?
A central issue in the case was whether the mother’s financial contributions were intended to be a gift, a loan or an investment giving rise to a beneficial interest.
The court drew a clear distinction between:
The ruling on this distinction turned on evidence, conduct and intention brought before Recorder Christopher Stirling.
Importantly, the court rejected retrospective explanations that were not supported by contemporaneous documents.
The judgment stated:
“This strikes me as inherently improbable. It has all the hallmarks of an explanation by way of retrospect.”
“This is the only contemporaneous written evidence in respect of the money and the purpose of its advance.”
Where money is advanced within families, particularly between parents and children, there remains a presumption of gift unless the evidence shows otherwise.
The case underlines how easily disputes can arise years later, where intentions are not clearly recorded at the time.
Living in the property matters
One of the most significant aspects of the judgment is the emphasis placed on occupation.
The court accepted that the mother funded the annexe on the shared understanding that it would be her home.
She paid not only for its construction but also for its upkeep, repairs and associated costs. She even took out commercial borrowing to fund the works herself.
These factors allowed the court to infer a common intention that she had an interest in the property, even though there was no express agreement and no legal title in place.
This highlights a crucial practical point for similar cases in future. If someone is contributing to a property and intends to live there, that fact alone may fundamentally alter how their contribution is characterised.
Contributions tied to occupation are far more likely to give rise to enforceable rights than contributions made at arm’s length.
Why independent advice at conveyancing stage is vital
Perhaps the clearest lesson from this case is the importance of independent legal advice for interveners at the conveyancing stage.
No one wants to think that their children’s relationships will break down, but the reality is that divorce remains a prospect in all marriages.
Had the mother received specific advice when the property was purchased or when the annexe was constructed, the position could have been clarified and recorded at that point in time.
A declaration of trust, a formal loan agreement or an express right of occupation could have avoided years of stressful litigation.
Too often, parents assume that family relationships will protect them. Unfortunately, when divorce, death or financial pressure intervenes, the lack of formal documentation leaves parties exposed.
This responsibility also falls to solicitors advising on conveyancing where third-party funds are involved. They should be asking clear questions:
These questions are not intrusive and seek to protect all parties in future actions, including financial remedy judgments.
Succession planning and tax considerations
The case also raises wider issues about succession planning, as parents often intend financial contributions to benefit the next generation while retaining security in later life.
Whether a payment is a gift out of income, a lifetime gift or a loan can have significant implications for Inheritance Tax, Capital Gains Tax and public funded care.
Without clarity, families may inadvertently undermine their own planning objectives, as what is intended as an act of generosity can later be treated very differently by the court.
A cautionary precedent
The Recorder acknowledged that cases of this nature are becoming more common and that pragmatism is essential.
Nevertheless, the litigation in this case was lengthy, complex and expensive for all parties and serves as a stark reminder that informal family arrangements can carry serious legal consequences.
For parents contributing to a family home and for adult children receiving that support, the message is clear.
Have the conversation, take independent legal advice and record the agreement to prevent future confusion and to offer peace of mind.
Doing so protects everyone involved and avoids the uncertainty and distress of resolving intentions years later in court.
Having played a role in this case and seen the impact on the family, I feel that this case is a reminder that careful planning at the outset is not about mistrust. It is about certainty, protection and peace of mind.
If you have been affected by a similar case or would like advice about matrimonial assets, including the role of interveners, please contact us.
