How can parents protect their financial support when helping their children purchase a home in Israel?
How can parents protect their financial support when helping their children purchase a home in Israel?
Many parents wish to help their son and daughter-in-law purchase their first home in Israel by contributing a substantial amount toward the purchase. A common concern arises: what happens to these funds if the couple later separates or divorces?
Will the money be returned?
Is it considered a loan or a gift?
Does it become part of the couple’s joint property?
The answers are not always straightforward -unless they are clearly defined in advance.
For this reason, it is highly recommended that the couple sign a prenuptial agreement or cohabitation agreement. These agreements provide a clear legal framework that regulates financial matters and property division in the event of separation or divorce.
A well – drafted agreement can:
• Define what constitutes joint property;
• Clarify which assets remain the separate property of each party;
• Establish how parental financial assistance is treated- whether as a gift (non-repayable) or a loan (repayable under agreed terms);
• Set out how both joint and individual assets will be divided.
In addition, such agreements may address other important matters, including spousal support, debts, inheritance rights, and business interests.
Parents may also consider structuring their financial support as a discretionary loan, providing an additional layer of protection in cases of divorce or even bankruptcy.
With over 35 years of experience, Cohen Segelov & Co. specializes in drafting comprehensive prenuptial and cohabitation agreements tailored to each family’s needs.
For more information, feel free to contact us:
+972-3-6134244
lisa@cslaw.co.il
